CAR-T, IPOs

Arie Belldegrun and David Chang score record IPO, now they plan to win the race to a historic FDA OK

Arie Belldegrun and David Chang are once again in the race of a lifetime — and they plan to stay in the lead to the first pioneering FDA OK in the field.

The two ex-Kite execs have pulled off the biggest biotech IPO of their generation, upsizing the offering to 18 million shares and pricing at $18 a share — the top of the range.

Arie Belldegrun

The Allogene offering brought in $324 million, pegging the market value of the company at $2.2 billion, and underwriters will soon have a chance to boost that some more. That sum edges out Axovant, which raised $315 million in 2015 to back an Alzheimer’s drug that turned out to be a complete bust.

“So far I have not seen a company that is all about allogeneic,” Belldegrun tells me in a phone interview, discussing the off-the-shelf approach to CAR-T they scooped up from Pfizer. “This is a huge opportunity.”

“We want to be in the lead,” he adds.

To do that, Allogene can now rely on a war chest filled with the bulk of the money raised in a monster, $744 million fundraising blitz through the year.

The next big transition point comes in the first half next year, when they go into the clinic with their lead therapy. If they stay on schedule — following an always hazardous course of clinical development — Chang says they could grab pivotal data by the end of 2021. In the meantime, they’ll also usher in another clinical program in 2019, with another therapy that could pursue multiple indications in oncology.

The pair have been there before, racing Novartis on personalized CAR-T therapies. The pharma giant just barely edged them out. But that was a technology that was 15 years in the making, says Belldegrun. Now they have a host of new tools, like gene editing, at their disposal. And by carving out a Pfizer group with 40 core staffers and a 4-year track record in preclinical work, they plan to make relatively quick work of this new race.

We’ll see later today how investors like the latest biotech unicorn to hit the Nasdaq, where Belldegrun and Chang made their mark with Kite Pharma — which sold to Gilead for $12 billion, making investors a bit giddy.

David Chang

Over the last 6 months they’ve raised $744 million for the company in the wake of in-licensing Pfizer’s off-the-shelf CAR-T portfolio, a figure that would have been considered something of a pipe dream before 2018 came around.

Now that the money blitz is done, opening up a 3-year runway to an appointment with the FDA, the company will continue a quest to develop the world’s first off-the-shelf CAR-T, a scientific challenge that could swipe aside the pioneering personalized drugs that are now on the market at Novartis and Gilead.

They’ve already doubled the size of the original team, and more hires are to come. Allogene also has some ambitious plans to establish a leading manufacturing effort, which will be key to their ultimate success in the field.

Goldman Sachs & Co, J.P. Morgan Securities, Cowen and Company, and Jefferies are acting as the joint book-running managers for the offering. 

This year we’ve seen a rapid surge in new biotech IPOs, which was largely unexpected after a couple years of steady running. And once again Belldegrun and Chang have their timing down perfectly. Inevitably, a deal like this will raise questions about just how hot things are on the Nasdaq right now, and whether we’re in a bubble.

But it’s not over yet.


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