In most IPOs, risk factors can range from anything from “our lead drug may not work” to the threat of famine and plague — they’re intended to cover virtually every contingency.
But as Ilan Ganot was out drumming up support for his $125 million IPO for Solid Biosciences in recent months, there was one key risk factor that hadn’t been included. The FDA had put its lead drug on partial clinical hold in November, with regulators refusing to allow researchers to start testing the high dose.
Only the low dose was green-lighted for the trial, the company disclosed in a tardy amendment to the IPO today, but the high dose was stymied until Solid could “submit additional CMC information that demonstrates that manufacturing capacity and product attributes can support the high-dose group.”
And that’s not all.
Earlier this month the biotech noted that gene therapy pioneer James Wilson from Penn had resigned from their scientific advisory board due to rising safety concerns related to high dosing using the vector he had developed.
Recently, James M. Wilson, M.D., Ph.D., resigned from our Scientific Advisory Board citing emerging concerns about the possible risks of high systemic dosing of AAV. If in the future we are unable to demonstrate that any such adverse events were not caused by the administration process or related procedures, the FDA, the European Commission, the EMA or other regulatory authorities could order us to cease further development of, or deny approval of, SGT-001 or our other product candidate for any or all targeted indications.
The news, though, didn’t hit until Solid Bio was wrapping up the pricing. Solid has been planning to sell about 6 million shares at $16 to $18 a share, with a market valuation of roughly $550 million. Thursday evening, Solid put out an announcement that they had sold 7.8 million shares at $16 apiece.
Their success comes amid a wave of fresh hits on the IPO front. Menlo Therapeutics bagged $119 million in an upsized offering to get the season underway on Thursday. And right on the heels of the move by Solid Bio, resTORbio raised $85 million and Armo garnered $86 million, bringing the total haul from 4 IPOs in two days to $415 million, which is sure to inspire plenty more new IPOs in Q1.
Ganot — a former JP Morgan investment banker — has made much of the fact that he’s a Duchenne MD dad out to find a gene therapy that could cure the lethal, rare disease. By introducing a synthetic dystrophin transgene construct, called microdystrophin, via a viral vector, the company hopes to prove it can do what Sarepta and others have been groping for with one decisive intervention. And he had attracted some heavyweight backers, including RA Capital and their colleagues at Bain.
Now their new risk factor includes the note that the drug may fail if they can’t get the FDA to lift the hold, which they were informed of at least two months ago.
I noted at the beginning of January that the IPO Ganot filed also failed to lay out exactly who owned what in the company, an odd omission for someone shooting to raise that much cash.
The latest updates include the fact that Ganot owns 4.3% of the company with JPMC Strategic Investments in for 9% and Perceptive at 8.7%.
Ganot himself will earn a base salary of $450,000 this year, with a shot at a $200,000 bonus. And his wife is also working for the company, with a salary that’s under $200,000.
The stock will trade as $SLDB, with everyone looking to see where it heads on Friday.
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