This is the first of a two-part series on “Life Sciences Connect” looking at the current robust financial climate for biopharma. Watch for a report, also via BioWorld, the daily biopharma news service from Clarivate Analytics, on the record pace of fund raising in Europe shortly.
The public offerings by immuno-oncology-focused Forty Seven Inc., which is developing anti-CD47 antibodies against a number of cancers, and Jerusalem-based Entera Bio Ltd. in the last week of June brought the number of biopharma companies graduating to the U.S. public ranks to 14 for the month. According to BioWorld‘s public financings database, you have to travel back to August 2000 for a higher monthly total when 17 companies went public. At the halfway mark of the year, 35 companies have now completed their listings on U.S. exchanges, a torrid pace that could test the annual record number of issues for one year set back in 2014.
At the halfway mark of the year, 35 companies have now completed their listings on U.S. exchanges, a torrid pace that could test the annual record number of issues for one year set back in 2014.”
The amount raised by the 14 graduating companies in June was $1.53 billion, which represents the highest amount ever raised in a single month. That total adds to the whopping $3.5 billion that has been generated from biopharma IPOs year-to-date.
Enthusiasm for new issues
Despite the ups and downs of the general markets this year, the enthusiasm for biopharma IPOs has remained steady, with many of the companies able to complete their offerings at the top end of their pricing range. Forty Seven, for example, raised $113 million by offering 7 million shares at $16, the high end of the range of $14 to $16. The company had originally planned to sell 6.7 million shares.
The Menlo Park, Calif.-based company plans to use those proceeds to support the further clinical development of its lead candidate, 5F9, through completion of existing phase I monotherapy and planned PD-L1 combination trials. So far, the company said, the candidate has demonstrated “promising activity” in six phase Ib/II trials in which it has treated more than 190 relapsed or refractory cancer patients with solid or hematologic tumors. But that didn’t seem to be enough to drive enthusiasm for the stock, which fell 6 percent on the first day of trading. (See BioWorld, June 29, 2018.)
5F9 is an IgG4 monoclonal antibody against CD47 that is designed to interfere with recognition of CD47 by the SIRPalpha receptor on macrophages, thus blocking what the company terms the “don’t eat me” signal, and rendering cancer cells susceptible to macrophages. In June, the company reported proof-of-concept data from two separate clinical trials of 5F9: an ongoing phase Ib/II trial evaluating the product in combination with rituximab in patients with relapsed/refractory non-Hodgkin’s lymphoma (r/r NHL) and a phase I pharmacokinetic and pharmacodynamic trial in patients with advanced solid tumors.
Data from the phase Ib part of the phase Ib/II study, across all 22 evaluable patients, showed an objective response rate (ORR) of 50 percent and a complete response rate (CR) of 36 percent. Tricida Inc. also completed an upsized IPO, raising $222 million from 11.7 million shares priced at $19, above the range of $16 to $18. The South San Francisco-based company is focused on the development and commercialization of TRC-101, a non-absorbed, orally dosed polymer drug designed to treat metabolic acidosis in patients with chronic kidney disease. Its shares (NASDAQ:TCDA) did well right out of the gate, closing up 37 percent at $26. (See Stock performance of 2018 public companies, below.)
In positive territory
Tricida was among the 18 companies of the group of graduating IPO companies that have seen their share prices move into positive territory since their first day of listing. They have contributed to a 16.7 percent average gain for the group at the close of the first half of the year.
Star performers include immuno-oncology company Armo Biosciences Inc., which saw its shares (NASDAQ:ARMO) soar 192 percent prior to the close of its acquisition by Eli Lilly and Co. for about $1.6 billion, in an all-cash transaction. The company’s lead product candidate is AM-0010, a long acting form of human interleukin-10 that is in phase III testing for the treatment of pancreatic ductal adenocarcinoma.
Irvine, Calif.-based Evolus Inc., which is working on a biosimilar version of Botox, raised $60 million in February from an offering of 5 million shares at $12, the low end of its range of $12 to $14, but has seen its share (NASDAQ:EOLS) value double since it completed its offering, growing 127 percent. The company is advancing PrabotulinumtoxinA, also known as DWP-450, an injectable 900 kilodalton botulinum toxin type A complex licensed from South Korea’s Daewoong Pharmaceuticals Co. Ltd.
Another company to see its shares (NASDAQ:SLDB) double in value since pricing is Cambridge, Mass.-based Solid Biosciences Inc. The gene therapy company received a boost in June when the FDA lifted the clinical hold on its phase I/II trial IGNITE DMD for its investigational microdystrophin gene transfer, SGT-001, for the treatment of Duchenne muscular dystrophy (DMD).
The agency earlier placed the clinical hold on the trial following the company’s report of a serious adverse event in the first patient dosed with SGT-001, which was eventually resolved.
As a result of the study delay, Solid said it now expects to report initial data from a pre-specified interim analysis of IGNITE DMD in the second half of next year.
A notable mention also goes to one of the first biopharma companies to list its shares this year: Cue Biopharma Inc., of Cambridge, Mass. The immunotherapy company, which is developing a class of biologics engineered to selectively modulate the human immune system to treat cancer and autoimmune diseases, closed its IPO of 8.8 million shares at $7.50 each. Since then, the shares (NASDAQ:CUE) have increased by 62 percent.
There are no shortage of companies looking to go public and join the IPO runway. Among the 11 that have filed with the SEC to undertake offerings is Aquestive Therapeutics Inc., a drug manufacturer developing oral film formulations of CNS disease therapies. It is looking to raise up to $69 million in an IPO. The Warren, N.J.-based company is developing its Pharmfilm formulations of already-known drugs.
“There are no shortage of companies looking to go public and join the IPO runway.”
San Diego-based Bionano Genomics Inc. became the latest company to file and is hoping to raise up to $35 million in an IPO. Working in the important genome analysis area, the company said in its filing that it is developing and marketing its Saphyr system, “a platform for ultra-sensitive and ultra-specific structural variation detection that enables researchers and clinicians to accelerate the search for new diagnostics and therapeutic targets and to streamline the study of changes in chromosomes.” It has applied to list on Nasdaq under the symbol BNGO.
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