Neu­rode­gen­er­a­tion up­start De­nali out­lines $100M IPO for its grow­ing clin­i­cal work

Can a team of neu­rode­gen­er­a­tion spe­cial­ists and at least one ear­ly-stage drug as­set out of Roche’s world-fa­mous Genen­tech group suc­ceed where so many have failed be­fore it?

I don’t know, but De­nali Ther­a­peu­tics is in the process of try­ing to raise rough­ly $100 mil­lion through an IPO to find out — which is just a frac­tion of the $350 mil­lion it gath­ered from some A list in­vestors in its ven­ture megarounds.

Ca­r­ole Ho

Housed in one of the gleam­ing new biotech build­ings in South San Fran­cis­co’s boom­ing Oys­ter Point, De­nali on Mon­day laid out its game plan with the SEC, look­ing to re­ly on a mix of new and old tar­gets, what they claim is a bet­ter plat­form tech for cross­ing the blood-brain bar­ri­er and bet­ter bio­mark­ers to give them an edge in pur­su­ing some of the Holy Grails in drug R&D: Alzheimer’s, Parkin­son’s, ALS among them.

De­nali plans to list as $DNLI.

In its laun­dry list of warn­ings to po­ten­tial in­vestors, De­nali not­ed that its lead drug — the Phase I drug DNL201 — is ac­tu­al­ly un­der a par­tial clin­i­cal hold by the FDA, as reg­u­la­tors want to lim­it the ex­po­sure of healthy vol­un­teers to their ther­a­py af­ter see­ing some se­vere re­ac­tions in an­i­mal mod­els at ex­treme dos­ing.

Their tar­gets in­clude RIP1, ApoE and LRRK2.

That’s not all we found out in the S-1. Aside from its top team and co-founder Marc Trevor Tessier-Lav­i­gne, the pres­i­dent at Stan­ford, Genen­tech pro­vid­ed the in­hibitor to LRRK for Parkin­son’s, hand­ing it over for $10 mil­lion in an up­front and fee, with an­oth­er $361 mil­lion in mile­stones.

The same kind of eco­nom­ics were in­volved when De­nali signed on with F-star, start­ing in the singe dig­its and ris­ing in­to the hun­dreds of mil­lions for a suc­cess­ful bird-dog­ging dis­cov­ery op­er­a­tion.

Ryan Watts

“They bring as­pects of the Genen­tech cul­ture that every­one has re­spect­ed for years,” F-Star CEO John Hau­rum told me about De­nali in 2016.

“This may sound like Drug 101,” CMO (and Genen­tech vet) Ca­r­ole Ho told me last year, but De­nali’s suc­cess af­ter so many fail­ures will get down to its abil­i­ty to en­gage the tar­get, with the right kind of bio­mark­ers in place to track their suc­cess. De­vel­op­ing bio­mark­ers ear­ly, she adds, is crit­i­cal. And the bi­ol­o­gy of these dis­eases is be­com­ing more clear through the rapid ad­vance of ge­net­ics re­search.

De­nali is run by 41-year-old Ryan Watts. His salary comes with a 50% bonus and a 3.9% stake in the eq­ui­ty that could well prove to be worth a for­tune af­ter a suc­cess­ful IPO.

Oth­er top in­vestors in­clude AKDL LP, with 28.1%, fol­lowed by ARCH at 15.3% and Flag­ship at 12.3%.

Brent Saunders [Getty Photos]

UP­DAT­ED: Ab­b­Vie seals $63B deal to buy a trou­bled Al­ler­gan — spelling out $1B in R&D cuts

Brent Saunders has found his way out of the current fix he’s in at Allergan $AGN. He’s selling the company to AbbVie for $63 billion in the latest example of the hot M&A market in biopharma.

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Af­ter rais­ing $158M, this up­start's founders have star back­ers and plans to break new ground in gene ther­a­py

Back in 2014, Stephanie Tagliatela opted to take an early exit out of her PhD program after working in Mark Bear’s lab at MIT, where she specialized in the synaptic connections between neuronal cells in the brain. She never finished that PhD, but she and fellow MIT student Kartik Ramamoorthi — who was on the founding team at Voyager — came away with some ideas for a gene therapy startup.

Today, fully 5 years later, she and Ramamoorthi are taking the wraps off of a $104 million mega-round designed to take the cumulative work of their preclinical formative stage for Encoded Therapeutics into human studies. They’ve now raised $158 million since starting out in Illumina’s incubator in the Bay Area, and they believe they are firmly on track to do something unique in gene therapy.

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Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

Sanofi/Re­gen­eron mus­cle ahead of a ri­val No­var­tis/Roche team, win first ap­proval in key rhi­nos­i­nusi­tis field

Re­gen­eron and their part­ners at Sanofi have beat the No­var­tis/Roche team to the punch on an­oth­er key in­di­ca­tion for their block­buster an­ti-in­flam­ma­to­ry drug Dupix­ent. The drug team scored an ac­cel­er­at­ed FDA ap­proval for chron­ic rhi­nos­i­nusi­tis with nasal polyps, mak­ing this the first such NDA for the field.

An­a­lysts have been watch­ing this race for awhile now, as Sanofi/Re­gen­eron won a snap pri­or­i­ty re­view for what is now their third dis­ease in­di­ca­tion for this treat­ment. And they’re not near­ly done, build­ing up hopes for a ma­jor fran­chise.

Two biotech uni­corns swell pro­posed IPOs, eye­ing a $600M-plus wind­fall

We’ve been wait­ing for the ar­rival of Bridge­Bio’s IPO to top off the wave of new biotech of­fer­ings sweep­ing through Nas­daq at the end of H1. And now we learn that it’s been sub­stan­tial­ly up­sized.

Ini­tial­ly pen­ciled in at a uni­corn-sized $225 mil­lion, the KKR-backed biotech has spiked that to the neigh­bor­hood of $300 mil­lion, look­ing to sell 20 mil­lion shares at $14 to $16 each. That’s an added 5 mil­lion shares, re­ports Re­nais­sance Cap­i­tal, which fig­ures the pro­posed mar­ket val­u­a­tion for Neil Ku­mar’s com­pa­ny at $1.8 bil­lion.

No­var­tis holds back the copy­cat brigade's at­tack on its top drug fran­chise — for now

A fed­er­al judge has put a gener­ic chal­lenge to No­var­tis’ block­buster mul­ti­ple scle­ro­sis drug Gilenya on hold while a patent fight plays out in court.

Judge Leonard P. Stark is­sued a tem­po­rary in­junc­tion ear­li­er this week, forc­ing My­lan, Dr. Red­dy’s Lab­o­ra­to­ries and Au­robindo Phar­ma to shelve their launch plans to al­low the patent fight to pro­ceed. He ruled that al­low­ing the gener­ics in­to the mar­ket now would per­ma­nent­ly slash the price for No­var­tis, even if it pre­vails. 

Tasly Bio­phar­ma pitch­es long-await­ed IPO — will it trig­ger an­oth­er $1B gold rush on HKEX?

In the run up to the Hong Kong stock ex­change’s an­tic­i­pat­ed rule change — open­ing the door for Chi­nese pre-rev­enue biotechs to go pub­lic clos­er to home — more than a year ago, Tasly Bio­phar­ma was one of the big play­ers whose ru­mored in­ter­est helped stoke en­thu­si­asm for the new list­ing venue. The com­pa­ny has since kept the drum­roll rum­bling in the back­ground, rais­ing a pre-IPO round and con­vinc­ing part­ner Trans­gene to swap own­er­ship in a joint ven­ture for eq­ui­ty. Now the oth­er shoe has fi­nal­ly dropped as ex­ecs out­line plans for a pipeline dom­i­nat­ed by car­dio­vas­cu­lar drugs.

Richard Gonzalez testifying in front of Senate Finance Committee, February 2019 [AP Images]

Ab­b­Vie's $63B buy­out spot­lights the re­turn of ma­jor M&A deals — de­spite the back­lash

Big time M&A is back. But for how long?

Over the past 18 months we’ve now seen three major buyouts announced: Takeda/Shire; Bristol-Myers/Celgene and now AbbVie/Allergan. And with this latest deal it’s increasingly clear that the sharp fall from grace suffered by high-profile players which have seen their share prices blasted has created an opening for the growth players in big pharma to up their game — in sharp contrast to the popular bolt-on deals that have been driving the growth strategy at Novartis, Merck, Roche and others.

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With 4 more biotech IPOs due to wrap up Q2, how is the class of 2019 far­ing?

With 22 biotech IPOs on the books and four more set to price in the last week of June, in­vest­ment ad­vis­er Re­nais­sance Cap­i­tal has tak­en the pulse of the re­cent rush.

By the IPO ex­perts’ count, 25 out of 32 health­care of­fer­ings this year have been from biotechs — dif­fer­ing slight­ly from Brad Lon­car’s tal­ly — and the over­all pic­ture is one of un­der­per­for­mance. While they av­er­aged a first-day re­turn of 9.0%, col­lec­tive­ly they have trad­ed down to a 5.9% re­turn. Turn­ing Point $TP­TX and Cor­texyme $CRTX emerged on top at the half-year mark, ris­ing 135% and 109% re­spec­tive­ly.