RAPT Therapeutics returns to Wall Street to revive IPO bid
On May 24, FLX Bio, a small cancer and inflammation biotech with backing from GV, changed its name to RAPT Therapeutics and filed confidentially for an IPO. On July 5th, they filed to raise up to $86 million. On July 22, they announced the IPO with a $75 million goal. And on August 1, they abruptly and without explanation called it all off.
Now, without explanation, they’re reviving the bid, filing again for a $75 million IPO, this time with a new bookrunner and a new drug candidate in the clinic. The terms will be the same: 5 million shares at $14-$16 per share. It would give them a diluted market value of $351 million.
The IPO appears to be the company’s first major funding stream since a $60 million Series C in 2017 and will supply revenue to propel their top cancer and inflammation drugs, respectively, further into the clinic.
RAPT was formed after Bristol-Myers acquired the immuno-oncology biotech Flexus in a 2015 deal worth up to $1.25 billion in 2015. Flexus then assigned some of its unacquired assets to a new company, FLX Bio, most notably FLX925, a CDK4/6 and FLT3 inhibitor then entering Phase 1.
But it wasn’t long before the founders — Terry Rosen and Juan Jaen — left and FLX925 hit a wall. The new owners, though, were able to convince GV and other funds to put $60 million behind a pivot to CCR4 inhibitors. This was in December 2017, shortly after Kyowa Hakko unveiled positive Phase III data for the anti-CCR4 therapy mogamulizumab.
RAPT has since focused on two such inhibitors: FLX475, which they hope will be a monotherapy for multiple cancers, and RPT193, an anti-inflammatory. This morning, the biotech announced they had begun a Phase I trial on RPT193 atopic dermatitis, although like other companies they hope to use the skin disease as a launching pad to broader anti-inflammatory applications.
The new S-1 appears to be largely the same, with updated language to reflect the expected progress the company has made in the three months since their last filing. (The amendment no longer says, for instance, that they plan on beginning a Phase I trial on RPT193 in August 2019.).
RAPT lacks clinical data beyond some positive Phase I tolerability findings on FLX475. It will use the proceeds to push RPT193 through its Phase I trial and FLX475 through a proof-of-concept Phase I/II trial on what they call “charged” tumors — those with high levels of CCR4 ligands, Treg and CD8+effector cells, including non-small cell lung cancer, triple-negative breast cancer, and gastric cancer. The trial will examine the drug as a monotherapy and in combination with Keytruda.
Their pitch to investors when they pivoted to CCR4 – and which they reiterated in their S-1 — was that by using small molecules and not antibodies (like mogamulizumab), they could be more selective and minimize the impact on T-cells throughout the body.
RAPT is also developing an inhibitor for GCN2i, a pathway they say is generally not active in healthy tissue and thus a good candidate for a targeted therapy. They aim to file an IND in 2020.