Los Angeles Business Journal

Kythera Plans $100 Million Stock Sale

By Business Journal Staff Monday, October 7, 2013

Kythera Biopharmaceuticals Inc. announced on Monday a $100 million secondary stock offering as it prepares to seek FDA approval of its groundbreaking drug that reduces double chins.

The Calabasas biotech, which went public last October, is seeking to capitalize on the results released last month of two large-scale clinical trials that showed the drug, ATX-101, was effective and had few side effects. The drug, injected into the chin, contains a synthetic version of a naturally occurring molecule in the body that helps break down dietary fat.

The Stage Three results prompted Goldman Sachs to initiate coverage of the stock and other brokerages to raise their ratings.

Kythera said it intends to use the proceeds to fund the ongoing development of ATX-101 and prepare for potential commercialization, including submitting a drug application to the Food and Drug Administration to gain approval for domestic sales. German drug company Bayer HealthCare holds development and commercialization rights outside North America. The balance will be used for working capital and general corporate purposes.

The company has not yet priced the shares nor released them for sale.

J.P. Morgan Securities LLC and BofA Merrill Lynch are acting as joint book-running managers, and representatives of the underwriters for the offering. Leerink Swann LLC is also acting as a joint book-running manager. Cowen and Co. is acting as co-manager.

Kythera intends to grant the underwriters a 30-day option to purchase up to an additional 15 percent of the number of shares sold to cover over-allotments.

Kythera raised $72.6 million in its initial public offering, and its overall market cap now stands at $855 million.

Shares closed down 35 cents, or a fraction of a percent, to $45.54 on the Nasdaq.