Adams Respiratory Therapeutics sets IPO price talk at $14 to $16 per share

By Ted A. Knutson

Washington, July 6 - Adams Respiratory Therapeutics set beginning price talk for its planned initial public offering of common stock at $14 to $16 per share with estimated net proceeds to the company of $72.2 million, or $87 million if the greenshoe is exercised in full.

The Chester, N.J., maker of Mucinex and developer of four other over-the-counter respiratory drugs also revealed it is planning to sell 5.33 million common shares and selling stockholders will be selling 1.75 million shares in the offering.

There is an underwriters' over-allotment of up to 1.06 million shares from the company.

Merrill Lynch & Co. and Morgan Stanley are bookrunners, with Deutsche Bank Securities and RBC Capital Markets also underwriters.

Of the proceeds, $25 million is being targeted for marketing Mucinex to consumers and medical professionals with $20 million to be spent on the development of two other over-the-counter drugs. In addition, $12.5 million is scheduled to be used for developing its recently in-licensed product candidate erdosteine and $14.7 million for potential acquisitions or drug licensing.

Selling stockholders include the Perseus-Soros BioPharmaceutical Fund LP, which is planning to divest itself of 1.34 million shares. The move would reduce the fund's stake in Adams to 17.0% from 25.5%.

In the IPO, Merrill Lynch Venture Partners LP is scheduled to sell 158,000 shares, cutting its investment to 2% from 3.01%.

According to the filing, John Adams Jr. wants to sell 249,000 shares, which would take his share of the company's stock to 3.15% from 4.73%. Adams is a former president of the company and the son of board chairman and founder John Q. Adam Sr.

Adams Respiratory shares are planned to be listed on the Nasdaq National Market under the symbol "ARXT".

The company made the announcement Wednesday in the third amendment to the firm's initial S-1 filing with the Securities and Exchange Commission.

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