In an end-of-year IPO blitz, 4 biotechs pitch new of­fer­ings to­tal­ing $370M

An im­muno-on­col­o­gy com­pa­ny fo­cused on a more po­tent T cell at­tack. Two biotechs that grabbed as­sets off the re­main­dered shelves at Big Phar­ma. And one gene ther­a­py up­start look­ing to cure Duchenne mus­cu­lar dy­s­tro­phy, one of the most con­tro­ver­sial fields in bio­phar­ma R&D.

Al­to­geth­er, the group of 4 mount­ed a last minute wave of IPO fil­ings dur­ing the wan­ing hours of 2017. And if they come even close to rais­ing the $370 mil­lion pen­cilled in for their S-1s we’ll have a good idea whether the ven­ture-backed brigade of pri­vate biotechs can con­tin­ue a sol­id run that sparked up the sec­ond half of last year.

Or not.

The phar­ma as­sets were ob­tained for lit­tle or no cash down, ask­ing in­vestors to pay for the re­search that will be need­ed to prove whether they are ac­tu­al­ly new drugs in the mak­ing. Duchenne mus­cu­lar dy­s­tro­phy has been both a mine field and a trea­sure map. And im­muno-on­col­o­gy rep­re­sents one of the most in­tense­ly com­pet­i­tive fields in drug R&D to­day.

So in case you were ask­ing, there are no sure things in biotech. Here’s the break­down.

Ar­mo Bio sets the stage for a piv­otal I/O pitch with $86M IPO

Pe­ter Van Vlas­se­laer

Com­pa­ny: Ar­mo Bio­Sciences
Ini­tial IPO tar­get: $86 mil­lion
CEO + stake: Pe­ter Van Vlas­se­laer (8.1%)
Found­ed: 2012
Based: Red­wood City, CA

Ar­mo Bio­Sciences’ $67 mil­lion mez­za­nine round at the end of last Au­gust set the stage for this $86 mil­lion IPO.

Cel­gene and Google’s GV came back along­side Klein­er Perkins and Or­biMed as well as a broad­er syn­di­cate in­clud­ing Chi­na’s Qim­ing Ven­ture Part­ners for the C round back­ing a new tech­nol­o­gy aimed at whip­ping up a more po­tent CD8-pos­i­tive T cell at­tack on can­cer cells — ground ze­ro in the cur­rent on­slaught of can­cer R&D pro­grams.

Ar­mo is fol­low­ing what has be­come a well trav­eled path­way in can­cer drug de­vel­op­ment, piv­ot­ing from ear­ly stage to late-stage stud­ies. And it’s sell­ing the po­ten­tial of a lead ther­a­py that has gar­nered some pos­i­tive re­sults in a hand­ful of pa­tients. The key pitch in the S-1:

The com­bi­na­tion with AM0010 and FOL­FOX showed in PDAC (pan­cre­at­ic duc­tal ade­no­car­ci­no­ma) pa­tients with a me­di­an num­ber of two pri­or ther­a­pies, a mPFS of 2.6 months. The mOS for the com­bi­na­tion of AM0010 and FOL­FOX is 10.2 months with a me­di­an fol­low-up time of 20.3 months with a range be­tween 15.8 and 25.9 months as of Oc­to­ber 2017. At that time, the one year sur­vival rate was 42.9%. These re­sults are of par­tic­u­lar in­ter­est com­pared to a mOS of 4.3 months, mPFS of 1.7 months and one-year sur­vival of 18.5% re­port­ed in a study of FOL­FOX in the sec­ond-line set­ting.

The first in­ter­im analy­sis of the Phase III is due in “ear­ly 2018,” with a 2020 read­out on the sec­ond in­ter­im analy­sis that could trig­ger a mar­ket­ing ap­pli­ca­tion. There’s al­so a pro­gram for non-small cell lung can­cer.

Klein­er Perkins con­trols about 20% of the shares now, trailed by Or­biMed at 19% and DAG Ven­tures at 11%. GV is in for 5.6% of the eq­ui­ty. The stock will be list­ed un­der the sym­bol $AR­MO.


An­oth­er drug off of No­var­tis’ back shelf trig­gers a quick­ie $85M IPO from PureTech

Chen Schor

Com­pa­ny: resTOR­bio
Ini­tial IPO tar­get: $85 mil­lion
CEO + stake: Chen Schor (8.8%)
Found­ed: 2017
Based: Cam­bridge, MA

Nine months af­ter PureTech ramped up a new com­pa­ny called resTOR­bio and then picked up a pair of drugs from No­var­tis’ out­li­cens­ing shelf, the biotech has giv­en birth to an $85 mil­lion IPO pitch.

ResTOR­bio’s for­tunes will rest on mTORC1 in­hibitors with a po­ten­tial to treat a va­ri­ety of ag­ing-re­lat­ed ail­ments, start­ed with res­pi­ra­to­ry tract in­fec­tions for the el­der­ly. A Phase IIb study cov­er­ing the south­ern and north­ern hemi­spheres is ex­pect­ed to read out in the sec­ond half of this year.

No­var­tis let go of resTOR­bio’s lead drug — RTB101 — for a batch of stock for NI­BR ac­count­ing for 9.4% of the shares, with no mon­ey down. A suc­cess­ful de­vel­op­ment pro­gram could trig­ger up to $24 mil­lion in mile­stones with roy­al­ties due on any sales, and the biotech has so far front­ed a to­ken $300,000 for their progress to date.

PureTech, which is run by Daphne Zo­har, owns 44.4% of the com­pa­ny with an­oth­er 20% held by Or­biMed.

PureTech ex­ec and resTOR­bio’s CEO Chen Schor holds 8.8% of the stock, which will be list­ed as $TORC.


Can Men­lo’s $1M drug deal with Mer­ck in­spire a $98M IPO to pay for Phase III?

Steven Bas­ta

Com­pa­ny: Men­lo Ther­a­peu­tics
Ini­tial IPO tar­get: $98 mil­lion
CEO + stake: Steven Bas­ta (3.7%)
Found­ed: 2011 (as Tiger­cat)
Based: Red­wood City, CA

Can a low-pro­file biotech with a sin­gle as­set picked up for $1 mil­lion up­front paid to Mer­ck pull off a $98 mil­lion IPO in ear­ly 2018?

Red­wood City, CA-based Men­lo Ther­a­peu­tics in­tends to find out.

The biotech, which had $75 mil­lion in cash in the bank at the end of Sep­tem­ber, has com­plet­ed a suc­cess­ful Phase II for pru­ri­tus. The group that found­ed the com­pa­ny picked up ser­lop­i­tant back in 2012 for what amounts to lunch mon­ey in this busi­ness, bag­ging rights to a drug (MK0594) that Mer­ck had put through a cou­ple of tri­als for al­co­hol de­pen­dence (ter­mi­nat­ed) and over­ac­tive blad­der.

The drug is an NK-1 re­cep­tor an­tag­o­nist, which the biotech’s ex­ecs be­lieve is a key me­di­a­tor to the urge to scratch or cough. Tamp that down and Men­lo be­lieves its drug can help peo­ple with a va­ri­ety of ail­ments tied to pru­ri­tus as well as chron­ic cough­ing. And once it goes in­to Phase III, Men­lo says it will owe Mer­ck an­oth­er $3 mil­lion along with up to $25 mil­lion in de­vel­op­ment and reg­u­la­to­ry mile­stones with an­oth­er $50 mil­lion in goal cash built on top of that — pro­vid­ed they can steer it to the mar­ket.

The S-1 pitch is es­sen­tial­ly based on da­ta from two Phase II stud­ies that were re­port­ed out last Sep­tem­ber. In­ves­ti­ga­tors re­port­ed a bor­der­line suc­cess (p<0.05) on the re­duc­tion from base­line VAS pru­ri­tus score and a change from base­line in av­er­age-itch VAS score at 8 weeks (p<0.001).

Vi­vo Cap­i­tal is the big share­hold­er, with 25% of the eq­ui­ty. Remedi­tex Ven­tures weighs in at 18% and Pre­sidio Part­ners con­trols 16.5% of the stock.

Bag­ging dis­cards off Big Phar­ma’s back shelves — or their re­jects — has be­come a pop­u­lar, though not nec­es­sar­i­ly suc­cess­ful, strat­e­gy. Vivek Ra­maswamy is build­ing a mul­ti­fac­eted en­ter­prise us­ing that ap­proach, though his first for­ay out with Ax­o­vant ran in­to a brick wall of fail­ure.

Men­lo plans to trade as $MN­LO.


Can a gene ther­a­py up­start fo­cused on a con­tro­ver­sial tar­get like Duchenne MD win over in­vestors to the tune of $100M?

Ilan Gan­ot

Com­pa­ny: Sol­id Bio­Sciences
Ini­tial IPO tar­get: $100 mil­lion
CEO + stake: Ilan Gan­ot (N/A)
Found­ed: 2013
Based: Cam­bridge, MA

It was clear at the end of Q1 last year that Sol­id’s $50 mil­lion round was aim­ing at a crossover to the pub­lic mar­kets, and the biotech did not dis­ap­point, post­ing its $100 mil­lion IPO on the last busi­ness day of the year.

Found­ed by Duchenne dad Ilan Gan­ot, the com­pa­ny has gained the sup­port of RA Cap­i­tal and its close con­fed­er­ates at Bain for a gene ther­a­py aimed at noth­ing less than a cure of DMD. 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.

The fact that not every­one in the field — in­clud­ing some at the FDA — is con­vinced that dy­s­trophin is the right bio­mark­er for ad­dress­ing this dis­ease, there’s ob­vi­ous­ly a long way to go in prov­ing it works.

The S-1 lists the in­vestors, but doesn’t spell out what per­cent­ages of the eq­ui­ty they own — a miss­ing fea­ture which will need to be patched in.

The biotech plans to list as $SLDB.

Alice Shaw, Lung Cancer Foundation of America

Top ALK ex­pert and can­cer drug re­searcher Al­ice Shaw bids adieu to acad­e­mia, hel­lo to No­var­tis

Jay Bradner has recruited a marquee oncology drug researcher into the ranks of the Novartis Institutes for BioMedical Research. Alice Shaw is jumping from prestigious posts intertwined through Mass General, Harvard and Dana-Farber to take the lead of NIBR’s translational clinical oncology group.

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Med­ical an­i­ma­tion: Mak­ing it eas­i­er for the site and the pa­tient to un­der­stand

Medical animation has in recent years become an increasingly important tool for conveying niche information to a varied audience, particularly to those audiences without expertise in the specialist area. Science programmes today, for example, have moved from the piece-to-camera of the university professor explaining how a complex disease mechanism works, to actually showing the viewer first-hand what it might look like to shrink ourselves down to the size of an ant’s foot, and travel inside the human body to witness these processes in action. Effectively communicating a complex disease pathophysiology, or the novel mechanism of action of a new drug, can be complex. This is especially difficult when the audience domain knowledge is limited or non-existent. Medical animation can help with this communication challenge in several ways.
Improved accessibility to visualisation
Visualisation is a core component of our ability to understand a concept. Ask 10 people to visualise an apple, and each will come up with a slightly different image, some apples smaller than others, some more round, some with bites taken. Acceptable, you say, we can move on to the next part of the story. Now ask 10 people to visualise how HIV’s capsid protein gets arranged into the hexamers and pentamers that form the viral capsid that holds HIV’s genetic material. This request may pose a challenge even to someone with some virology knowledge, and it is that inability to effectively visualise what is going on that holds us back from fully understanding the rest of the story. So how does medical animation help us to overcome this visualisation challenge?

Hal Barron, GSK's president of R&D and CSO, speaks to Endpoints News founder and editor John Carroll in London at Endpoints' #UKBIO19 summit on October 8, 2019

[Video] Cel­e­brat­ing tri­al fail­ures, chang­ing the cul­ture and al­ly­ing with Cal­i­for­nia dream­ers: R&D chief Hal Bar­ron talks about a new era at GSK

Last week I had a chance to sit down with Hal Barron at Endpoints’ #UKBIO19 summit to discuss his views on R&D at GSK, a topic that has been central to his life since he took the top research post close to 2 years ago. During the conversation, Barron talked about changing the culture at GSK, a move that involves several new approaches — one of which involves celebrating their setbacks as they shift resources to the most promising programs in the pipeline. Barron also discussed his new alliances in the Bay Area — including his collaboration pact with Lyell, which we covered here — frankly assesses the pluses and minuses of the UK drug development scene, and talks about his plans for making GSK a much more effective drug developer.

This is one discussion you won’t want to miss. Insider and Enterprise subscribers can log-in to watch the video.

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Flu Virus (Source: CDC)

FDA ex­pands Xofluza ap­proval as Roche strug­gles to catch loom­ing flu mar­ket

As a potentially powerful flu season looms, so does a big test for Roche and its new flu drug, Xofluza. The Swiss giant just got a small boost in advance of that test as the FDA expanded Xofluza’s indication to include patients at high risk of developing flu-related complications.

Xofluza (baloxavir marboxil) was approved last October in the US, the first landmark flu drug approval in 20 years and a much-needed green light for a company that had watched its leading flu drug Tamiflu get eaten alive by generics. Like its predecessor, the pill offered a reduction in flu symptoms but not a cure.

EMA backs sev­en ther­a­pies, in­clud­ing Mer­ck­'s Ebo­la vac­cine

The first-ever Ebola vaccine is on the precipice of approval after the European Medicine’s Agency (EMA) backed the Merck product in this week’s roster of recommendations.

The drugmaker $MRK began developing the vaccine, christened Ervebo, during the West African outbreak that occurred between 2014 and 2016, killing more than 11,000.

The current outbreak in the Democratic Republic of Congo (DRC) has shown case fatality rates of approximately 67%, the agency estimated. Earlier this year, the WHO declared the outbreak — which so far has infected more than 3,000 people — a public health emergency of international concern.

Ronald Herb­st fol­lows Med­Im­mune ex­o­dus to Pyx­is CSO post; Jeff God­dard to suc­ceed CEO of AIT Bio­science

→ The outflow of top execs from MedImmune continues to fill the leadership ranks of smaller biotechs. The latest to take off is Ronald Herbst, the head of oncology research, who’s assuming the CSO post at Pyxis Oncology.  

Herbst was part of the old MedImmune organization AstraZeneca CEO Pascal Soriot restructured earlier this year, reorganizing the company and eliminating the storied subsidiary as a separate organization.

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Mer­ck is tak­ing the ax to its US op­er­a­tions, cut­ting 500 jobs in its lat­est re­or­ga­ni­za­tion

Merck is cutting 500 jobs in its US sales and headquarters commercial teams in its latest effort to find new ways to streamline the operation.

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UP­DAT­ED: J&J's Xarel­to, Amar­in's Vas­cepa are cost-ef­fec­tive, not bud­get friend­ly — ICER

ICER, an increasingly influential cost-effectiveness watchdog in the United States, has concluded in its review of treatments for cardiovascular disease that while the cost of J&J’s Xarelto and Amarin’s Vascepa meet its benchmark for value pricing — the two treatments will not likely treat as many patients as hoped without surpassing the annual budget threshold calculated by ICER for each therapy.

Mi­rati preps its first look at their KRAS G12C con­tender, and they have to clear a high bar for suc­cess

If you’re a big KRAS G12C fan, mark your calendars for October 28 at 4:20 pm EDT.

That’s when Mirati $MRTX will unveil its first peek at the early clinical data available on MRTX849 in presentations at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston.

Mirati has been experiencing the full effect of a rival’s initial success at targeting the G12C pocket found on KRAS, offering the biotech some support on the concept they’re after — and biotech fans a race to the top. Amgen made a big splash with its first positive snapshot on lung cancer, but deflated sky-high expectations as it proved harder to find similar benefits in other types of cancers.

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