It takes a really good story to complete a successful biotech IPO these days. The key elements: Hot technology, deep pocket investors, and a hefty crossover round sitting in the bank with a clean shot at an important near-term catalyst.
Gemphire didn’t have any of that. And as a result, it was fortunate to wind up raising half of what it set out to gain when it filed its S-1 back in April.
The Northville, MN-based biotech $GEMP captured $30 million by selling 3 million shares at $10 each. And its shares traded down on its first day, dropping 8%. That fits into the experience of most new biotech IPOs, which generally are not doing well after their debut.
Gemphire had just a few million in cash six months ago, leaving it without the reserves needed to get very far without a fresh injection of capital. It has one drug in the clinic, gemcabene, in-licensed from Pfizer, which is still under a 12-year-old partial clinical hold at the FDA that prevents the company from running a study that lasts longer than six months due to toxicity concerns. And it’s focusing on a cholesterol pill for patients with homozygous familial hypercholesterolemia (HoFH), a field that has attracted a considerable amount of interest from rivals in recent years.
The company was founded by a pair of Pfizer vets, Charles Bisgaier and David Lowenschuss, who landed rights to the drug in 2011. But the S-1 also notes that Pfizer can still revoke the license, with a provision that it can get the drug back in five years if Gemphire can’t adequately commercialize the drug.
The best place to read Endpoints News? In your inbox.
Comprehensive daily news report for those who discover, develop, and market drugs. Join 34,900+ biopharma pros who read Endpoints News by email every day.Free Subscription