Cirius withdraws $86M IPO as vaunted 'Year of NASH' draws to brutal close
Cirius Therapeutics didn’t wait for the government shutdown to end before it filed its IPO in January. It was, as JP Morgan analysts had predicted the month prior, “The Year of NASH” and Cirius believed their Phase II program could raise $86 million.
Today, eleven months and a slew of industry-wide NASH failures later, Cirius is withdrawing their IPO. The news adds perhaps 2019’s final nail in expectations that were first buried months ago.
Cirius was far from immune to the NASH trial failures. The biotech has one product: MSDC-0602K, a molecule designed to bind to part of the mitochondria and balance the metabolism in patients with NASH with fibrosis. In Cirius’s S-1, they billed their 402-person EMINENCE trial as “to our knowledge… the largest Phase 2b clinical trial focused on the treatment of NASH.”
If so, it proved to also be the most voluminous Phase IIb trial failure in NASH history. Cirius announced last month their drug missed its primary endpoint, failing to decrease patients’ NAS score by at least 2 points against placebo with statistical significance. Cirius said other results from the study still “potentially” support launching a Phase III trial, but the news appears to have sapped the biotech’s last hopes for their IPO.
Cirius joined some large players, most notably Gilead, who saw their NASH dreams dashed or set back in 2019. The California-based big biotech saw three different trial failures for its NASH drug, both as a monotherapy and in combination. Days ago, Boehringer dumped a NASH drug they acquired for $250 million after a Phase I raised safety concerns.
The struggles aren’t limited to the clinic. Investors have expressed skepticism about NASH drugs’ commercial prospects. Although NASH – or nonalcoholic steatohepatitis – is thought to affect about 50 million Americans and is marked by damaging liver scarring and fat buildup, most patients have never heard of the condition and don’t know they have it. It requires a painful biopsy to diagnose, limiting the number who will ever actually be diagnosed. Reimbursement is also a question; broadly, American payers have tried to limit their exposure to chronic therapies.
The result has been few NASH buyouts in 2019, although a couple biotechs proved successful on public markets with 89bio and Genfit fetching $85 million and $107 million respectively.