Gene-editing upstart lays out a $100M IPO with a plan to quickly leapfrog the leaders in their field
CRISPR/Cas9. TALEN. Zinc finger nuclease tech. The ARC nuclease.
You may have heard about those first 3 gene-editing platforms. But what’s an ARC nuclease?
ARCUS was put together by a group of scientists in North Carolina who have been making the pitch that they have a better way to accomplish the DNA hacking popularized 5 years ago by the original trio of startups: CRISPR Therapeutics, Editas, Intellia. Those biotechs are just now getting into the clinic, with Precision BioSciences coming in right behind with its own newly filed IND. They’re focused on a gene-edited allogeneic (off the shelf) CAR-T cell program targeting CD19 (not for the first time) which they plan on launching soon, with a Phase I/IIa clinical trial in patients with acute lymphoblastic leukemia and non-hodgkin lymphoma.
ARCUS belongs to the startup Precision BioSciences, which on Friday filed for an IPO, pencilling in $100 million as the target.
Their claim to fame rests on a one-step engineering process, which they are selling as a simpler, more effective way of completing the gene editing process that will translate well to a less expensive mass production approach.
The simple explanation is that Precision Bio believes it has a better surgical tool — the ARC nuclease — for slicing into a specific DNA sequence needed to correct a disease.
This ARC nuclease, they say, is “a fully synthetic enzyme similar to a homing endonuclease but significantly improved to be the starting point for the genome-editing platform.” It’s small, they claim, with “incomparable” specificity that can be customized to hit the right target in just the right way to improve potency.
Every one of the pioneers has a similar claim to the best tech. CRISPR $CRSP and Intellia $NTLA are Cas9 specialists, popularizing a new tool created by Jennifer Doudna and Emmanuelle Charpentier that’s known for being cheap and easy to use. This tech has spread like wildfire in academic labs. Editas $EDIT is using a new-and-improved version of Cas9. Cellectis $CLLS CEO André Choulika is diplomatic about it, but he’s passionate about TALEN, which he helped create. Sangamo, which only recently offered its first human data, was off target on the data but happy about the effect it was seeing in humans.
All the pioneers have seen their shares beat up over the past year. But then, that’s true for a lot of public biotechs.
The whole field, which has attracted large investments, is primarily based on non-human primate data. But it’s at a crossroads, with much more human data on the near horizon. The winners will be richly rewarded. The losers will face the scrap heap.
The Durham, NC-based biotech with close connections to Duke rolled out a $110 million mega round last summer from a laundry list of backers that included Gilead. And as we said at the time, it had every earmark of a classic crossover round pointed straight at the $100 million IPO you’re reading about now.
ArrowMark Partners led the deal and was joined by other new investors: Franklin Templeton Investments, Cowen Healthcare Investments, Brace Pharma Capital, Pontifax AgTech, OCV Partners, Adage Capital Management, Cormorant Asset Management, Vivo Capital, Alexandria Venture Investments, Ridgeback Capital, Agent Capital, and entities affiliated with Leerink Partners. Existing investors venBio, F-Prime, RA Capital Management, Amgen
Ventures, Osage University Partners, DUMAC, and the Longevity Fund also participated in the financing.
Gilead followed up with a $445 million pact with Precision in the fall, focused on hepatitis B. And then gene editing experts at the University of Pennsylvania stepped up with a scientific collaboration. They split off their ag ops just ahead of the new round last year.
The top 3 execs haven’t exactly shortchanged themselves on income. CEO Matthew Kane took home a compensation package worth $1.6 million for last year. CFO Abid Ansari snagged $1.4 million and David Thompson, the chief development officer, got $1.8 million — all big money in the startup world. They also got raises for their base salary, now at $523,000 for Kane, who also has 5.6% of the stock, which will be worth millions if the IPO comes in as they hope.
Jeff Smith — a co-founder and CTO out of Duke University — has a wedge of 10% of the equity, which puts him up with the two top investors: venBio at 11% and F-Prime at 9.7%. The other scientific co-founder is Derek Jantz, whose bio includes a citation for early work developing the zinc finger tech.