Norway biotech Ultimovacs plans IPO to develop cancer drug

OSLO (Reuters) - Norway’s Ultimovacs plans to raise around 700 million Norwegian crowns ($82 million) in an initial public offering in early 2019 to help fund the development of its immunotherapy cancer drug.

“Our main investors are positive and will take a significant part of the amount we hope to raise,” Chief Executive Oeyvind Kongstun Arnesen told Reuters in an interview.

Ultimovacs hopes to first get the go-ahead to expand a U.S. trial launched earlier this year to test whether its UV1 vaccine candidate can combat malignant melanoma in combination with Merck & Co's MRK.N top-selling cancer treatment Keytruda.

“We are planning the IPO as early as possible in the first half of 2019 and we are optimistic about the outcome,” he said.

Among the top owners of the seven-year old firm are Norwegian billionaire investors Stein Erik Hagen and Bjoern Rune Gjelsten as well as two firms founded by Norwegian hospitals.

Ultimovacs has hired brokerages DNB Markets and ABG Sundal Collier for the IPO, but Arnesen declined to discuss valuation.

Arnesen also held out the possibility that the company could be taken over by one of the major pharmaceutical players.

“We haven’t seen any direct interest in buying the entire company so far, but we are in continuous dialogue with big pharma companies that deal with immunotherapy and cancer.”

“We are in discussions with one of the major players about two specific projects, and I expect a conclusion on these talks at the latest by the end of the year,” Arnesen added.

While Ultimovacs believes UV1 could generate commercial revenues from 2022-2023 when the study is scheduled for completion, it is also looking for income at an earlier stage from licensing deals with other drug firms.

“If we document that the vaccine works, it can be combined with other immunotherapy treatments for cancers that are coming, so I expect a substantial demand for licenses ... It’s probably the most likely way for us to generate revenue,” the CEO said.

“In the long run our goal is to spread out to several different types of cancer in different stages, but that is in a ten-year perspective.

($1 = 8.5333 Norwegian crowns)

Editing by Terje Solsvik and Alexander Smith