CurrentOfferings.com Story:

Critical Therapeutics files IPO

By Andrew Morse, The Deal, March 19, 2004

Cambridge, Ma.-based biotech company Critical Therapeutics Inc. said Friday, March 19, that it planned to raise as much as $103 million an initial public offering of its shares. The company, which designs products to regulate the body's response to asthma, did not detail the amount or price of shares to be sold.

The IPO plans, disclosed in a filing with the U.S. Securities and Exchange Commission, follows a $56 million second-round financing completed in October. That round was led by new investors � Advanced Technology Ventures of Waltham, Mass., and Johnson & Johnson of New Brunswick, N.J.

Other participants in the last financing round were new investor Oxford Bioscience Partners of Boston and prior investors MPM Capital, also of Boston, and HealthCare Ventures LLC of Princeton, N.J. Since its inception three years ago, Critical has raised $75 million.

Critical's filing comes as the market for biotech IPOs appears to be closing after a brief opening in the public funding window. Earlier this week, Tercica Inc. and Xcyte Therapies Inc. had ponderous launches after pricing well below their expected ranges. Some companies, including Anadys Pharmaceuticals Inc. on Friday, have delayed or postponed their offerings.

"Critical has some important attributes, they've got some big backers and a product that is close to approval," said Jeff Hirschkorn, senior IPO analyst at Current Offerings, a research boutique. "But biotech is always a crapshoot."

Critical's offering is being underwritten by SG Cowen, CIBC World Markets, Piper Jaffray and Leerink Swann & Co. The company is receiving legal advice from Steven Singer and Stuart Falber at Hale and Dorr LLP while Margaret Brown at Skadden, Arps, Slate, Meagher & Flom LLP is advising the underwriters.

Singer also advised Critical Therapeutics on its last round of funding.

Critical's most advanced product is Zyflo, an immediate release medication for treating asthma. The company hopes to get the product on market in the first half of 2005.

Though the company did post revenue about $1 million in revenue in 2003, it has continued to rack up losses, which ballooned from roughly $6 million in 2002 to more than $25 million in 2003.

The company has a collaborative agreement with Gaithersburg, Md.-based MedImmune Inc., which developed the FluMist inhaled influenza vaccine. Under the terms of that deal, the two companies are working on Critical's HMGB1 product that could be used to treat inflammatory diseases. The drug is in preclinical testing.

Critical Therapeutics plans to list on the NASDAQ National Market under the symbol "CRTX."