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Waltham biotech Adnexus looks to join IPO parade

Adnexus Therapeutics Inc., an ambitious young biotech company in Waltham, says it is going public.

The five-year-old firm, still in the early stages of developing an cancer drug, plans to raise $86 million in an initial public offering in the coming months, according to documents filed with the Securities and Exchange Commission.

If successful, Adnexus would be the latest in a stream of local IPOs this year. Fourteen Massachusetts companies have already gone public through mid-August, the most since the tech boom ended in 2000, according to data collected by Renaissance Capital's IPOhome.com division. By contrast, just nine local companies went public in all of last year. Nationwide, 219 have filed for IPOs so far this year, up 18 percent compared to the same period a year ago.

Biotech companies are riding the IPO wave. In Massachusetts, five life sciences firms have gone public this year: Molecular Insight Pharmaceuticals Inc. in Cambridge, Insulet Corp. in Bedford, Synta Pharmaceuticals in Lexington, Sirtris Pharmaceuticals Inc. in Cambridge, and Helicos BioSciences Corp. in Cambridge.

"The market is the strongest we have seen since 2000," said Phil Stiller, an IPO research analyst with Renaissance, although he added the IPO pipeline has slowed down in recent weeks because of the upcoming Labor Day holiday and market turmoil.

"Typically, we see the most biotechs when the market is doing the best, because a lot of biotech investments are risky," Stiller said. "If people have an appetite for risk, the biotech deals tend to get done."

Meantime, Adnexus says it hopes to use its IPO proceeds to develop a novel class of drugs called Adnectins to treat cancer, diabetes, and many other diseases. The drugs will be based on a protein called human fibronectin that is found in typically found in blood plasma, according to the company's SEC filing. It has not yet set a date or an IPO price.

Adnexus has already raised nearly $76 million in venture capital, including a $15.5 million round earlier this month led by HBM BioVentures. Other investors include Atlas Venture in Waltham, Flagship Ventures in Cambridge, Polaris Venture Partners in Waltham, and Venrock Associates.

In February, Adnexus signed a partnership with the drug giant Bristol-Myers Squibb Co.. As part of the deal, Bristol-Myers Squibb paid Adnexus $20 million and agreed to fund further research work over the next three years.

Adnexus said it could not comment on the pending IPO because it is now in the federally mandated "quiet period" that precedes a stock offering.

Like many other fledgling biotech companies, Adnexus is a long way from winning federal approval to sell drugs and is not generating much revenue. Last year, it lost $14.3 million, and as of the end of June the company had an accumulated $59.5 million in debt.

Investors are betting on the company's long-term promise, not its short-term returns. Adnexus' first drug, in early stage clinical trials, is a cancer treatment called Angiocept. Adnexus said the drug blocks the formation of new blood vessels in tumors, which in turn keeps them from growing. The company hopes to begin phase 2 clinical trials in the first quarter of next year, a key part of the process to prove the drug works.

Lehman Brothers Inc. and UBS Securities LLC are the lead underwriters for the stock offering.

Adnexus was called Compound Therapeutics Inc. when it was founded five years ago and changed its name in June 2006. It has 58 employees, 42 of whom are in research and development. The company's chief executive, John Mendlein, previously ran a privately held biotech company called Affinium Pharmaceuticals Inc. in Austin, Texas, before joining Adnexus in 2005.

Todd Wallack can be reached at twallack@globe.com.

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