On the heels of $250M launch, Centessa barges ahead with an IPO to fuel its 10-in-1 Medicxi pipeline
Francesco De Rubertis made no secret of IPO plans for Centessa, his 10-in-1 legacy play. Barely two months later, the S-1 is in.
The hot-off-the-press filing depicts the same grand vision that the longtime VC touted when he did the rounds in February: Take the asset-centric mindset that he’s been preaching at Medicxi over the years, and roll up a bunch of biotech upstarts, with unrelated risk profiles, into 1 pharma company that can carry on the development at scale.
They will be doing it without Moncef Slaoui, who was featured prominently in the initial press release as chief scientific officer and advisor. Ejected from a prominent GlaxoSmithKline-affiliated board seat and all biotech positions following a “substantiated” case of sexual harassment (for which he apologized), the retired Operation Warp Speed chief was nowhere to be seen in the S-1.
In the document, Centessa — helmed by Saurabh Saha, the former global head of translational research at Bristol Myers Squibb — spelled out the nitty gritty details of fitting all the puzzle pieces together. As it turned out, it took 11 Medicxi subsidiaries to make Centessa (including 2 that eventually merged), and the management teams at each one were promised their own incentivization arrangements for staying on to steer the fleet.
The initial ask for the Nasdaq debut is $100 million, but given the $250 million Series A, you can almost be certain they’re eyeing a much larger figure than the increasingly unreliable placeholder.
Not that Centessa is strapped for cash. Officially formed last October, it’s only burned through $3.1 million by the end of 2020. The deep-pocketed investor syndicate features General Atlantic, Vida Ventures, Janus Henderson Investors, Boxer Capital, Cormorant Asset Management, T. Rowe Price, Venrock Healthcare Capital Partners, Wellington Management Company, BVF Partners, EcoR1 Capital, Franklin Templeton, Logos Capital, Samsara BioCapital and LifeSci Venture Partners.
So why the rush? The company’s IPO disclosure suggests it was a key part of De Rubertis’ pitch to the biotech entrepreneurs as he convinced them to come on board.
Direct incentivization is achieved through two principle financial incentives: first, through each founder-subject matter expert having a significant equity stake in Centessa and, thereby, compensated commensurately with the Company’s performance; second, they disproportionately share in upside through certain agreed milestones payment of a pre-agreed amount payable upon defined events such as regulatory approval of an applicable drug or the payment of a pre-agreed percentage of the net aggregate cash proceeds from certain strategic transactions (including partnerships / out-licensing agreements and/or a sale) concerning the relevant Centessa Subsidiary.
In total, the milestone payment for a given subsidiary can add up to somewhere in the “low eight figure range,” to be divided among the top execs and employees.
They include Inexia, a 3-year-old biotech whose assets were transferred earlier this year to Orexia, which was similarly focused on narcolepsy and now boasts of both oral and intranasal orexin receptor agonists to directly address the underlying pathology of orexin neuron loss, as well as other neurological disorders characterized by excessive daytime sleepiness.
Of the 16 programs now in the Centessa pipeline, the four clinical-stage assets will receive the largest chunk of cash from the IPO raise. That means funding two Phase III studies for Palladio’s kidney drug lixivaptan, ApcinteX’s SerpinPC for hemophilia, PegaOne’s anti-EGFR imgatuzumab and Z Factor’s ZF874 for alpha-1-antitrypsin deficiency.