Shut­down thrusts Gos­samer Bio on­to a rarely used path for fixed-price IPO

From day 1 Gos­samer has al­ways been a biotech in a hur­ry. And they’re not about to let a lit­tle thing like a gov­ern­ment shut­down stymy their plans for an IPO.

As the par­tial US gov­ern­ment shut­down con­tin­ues to par­a­lyze the SEC, Gos­samer Bio has elect­ed to use a rare and riski­er method to make the leap in­to Nas­daq. The biotech is fore­go­ing the typ­i­cal­ly lengthy SEC re­view of their prospec­tus to green­light the list­ing in fa­vor of en­abling their reg­is­tra­tion by lock­ing in their IPO price 20 days be­fore mak­ing a mar­ket de­but.

Ac­cord­ing to the amend­ed fil­ing, it plans to of­fer 14.4 mil­lion shares priced at $16/share, which will al­low the com­pa­ny to raise rough­ly $230 mil­lion in gross pro­ceeds. Mean­while, ex­ist­ing stock­hold­ers have in­di­cat­ed their in­ter­est in pur­chas­ing about $100 mil­lion in shares in the of­fer­ing at the IPO price of $16.

The San Diego-based biotech orig­i­nal­ly filed its prospec­tus with the SEC on De­cem­ber 21, one day pre­ced­ing the shut­down, but on Wednes­day amend­ed that fil­ing to re­flect its new plan to go pub­lic via the fixed-price IPO. This type of reg­is­tra­tion will al­low it to be­gin trad­ing on Feb­ru­ary 13 on the Nas­daq un­der the sym­bol $GOSS.

The road to an IPO can be long and lit­tered with SEC com­mu­ni­ca­tion that re­flects the agency’s deep dive in­to the com­pa­ny’s dis­clo­sures be­fore the green light is sanc­tioned, fol­low­ing which in­vestors in­di­cate their en­thu­si­asm or lack there­of by mak­ing bids on the high­er or low­er end of the price band of­fered. The ab­sence of an ex­plic­it SEC en­dorse­ment could serve to haunt the com­pa­ny lat­er down the line, if the dis­clo­sures made by the com­pa­ny come up short or the SEC ques­tions them up­on re­open­ing.

The Wall Street Jour­nal ear­li­er this week sug­gest­ed that Nas­daq has balked at the 20-day rule. Nev­er­the­less, Gos­samer will test the wa­ters and per­haps in­spire oth­ers to fol­low suit. TCR2 is al­so study­ing the IPO gam­bit, ac­cord­ing to the WSJ re­port.

The com­pa­ny, orig­i­nal­ly named FSG Bio, was found­ed by for­mer Re­cep­tos CMO Sheila Gu­jrathi and Fa­heem Has­nain, the ex-Re­cep­tos CEO, in 2015, short­ly af­ter Re­cep­tos was bought out by Cel­gene. Cur­rent­ly 14 se­nior ex­ec­u­tives and di­rec­tors to­geth­er hold near­ly 33% of the com­pa­ny, whose two biggest share­hold­ers are ARCH Ven­ture Part­ners with 17.5% and Omega Fund V with 15.1%.

Fa­heem Has­nain on stage at the End­points News / Pharm­Cube #BI­IS18 sum­mit in Shang­hai, Oc­to­ber 2018End­points News

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Gos­samer’s name is tied to the sym­bol­ism be­hind the gos­samer thread, a frag­ile, in­vis­i­ble con­nec­tion that binds re­la­tion­ships. The biotech is fo­cused on im­munol­o­gy, in­flam­ma­tion and on­col­o­gy, has three drugs in the clin­ic, and an­oth­er in pre­clin­i­cal test­ing.

Bo­fA Mer­rill Lynch, Leerink, Bar­clays, and Ever­core are the joint bookrun­ners on the deal.

UP­DAT­ED: Ab­b­Vie seals $63B deal to buy a trou­bled Al­ler­gan -- an­a­lysts turn thumbs down

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.

AbbVie $ABBV has agreed to pay $188.24 a share — cash and stock — for the troubled Allergan, reflecting a 45% premium as investors bid up shares in anticipation of a much buzzed about company split. That price — with each share of Allergan worth 0.8660 AbbVie shares and $120.30 in cash — reflects a sharp fall from the $330 peak for Allergan and Saunders 4 years ago — but much better than anything shareholders had in mind for the near future.

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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.

UP­DAT­ED: In sur­prise switch, Bris­tol-My­ers is sell­ing off block­buster Ote­zla, promis­ing to com­plete Cel­gene ac­qui­si­tion — just lat­er

Apart from revealing its checkpoint inhibitor Opdivo blew a big liver cancer study on Monday, Bristol-Myers Squibb said its plans to swallow Celgene will require the sale of blockbuster psoriasis treatment Otezla to keep the Federal Trade Commission (FTC) at bay.

The announcement — which has potentially delayed the completion of the takeover to early 2020 — irked investors, triggering the New York-based drugmaker’s shares to tumble Monday morning in premarket trading.

Celgene’s Otezla, approved in 2014 for psoriasis and psoriatic arthritis, is a rising star. It generated global sales of $1.6 billion last year, up from the nearly $1.3 billion in 2017. Apart from the partial overlap of Bristol-Myers injectable Orencia, the company’s rival oral TYK2 psoriasis drug is in late-stage development, after the firm posted encouraging mid-stage data on the drug, BMS-986165, last fall. With Monday’s decision, it appears Bristol-Myers is favoring its experimental drug, and discounting Otezla’s future.

The move blindsided some analysts. Credit Suisse’s Vamil Divan noted just days ago:

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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.

Eye­ing a $500M peak sales pot, Almi­rall dou­bles down on le­brik­izum­ab as Der­mi­ra lines up PhI­II

With eyes on what it be­lieves is a $500 mil­lion peak rev­enue op­por­tu­ni­ty in Eu­rope, Barcelona-based Almi­rall has stepped up with $50 mil­lion in cash to take up the op­tion on Der­mi­ra’s IL-13 an­ti-in­flam­ma­to­ry drug le­brik­izum­ab just ahead of the start of Phase III. And there’s an­oth­er $30 mil­lion due as the late-stage pro­gram gets geared up.

That shouldn’t be long from now, as Der­mi­ra ex­pects to be­gin the late-stage tri­al work for atopic der­mati­tis be­fore the end of this year as it fol­lows a trail that ex­ecs in­sist leads to block­buster re­turns. Along the way, they’ll need to take on the 600-pound go­ril­la in atopic der­mati­tis: the IL-13/IL-4 drug Dupix­ent, from Re­gen­eron and Sanofi. Ri­vals al­so in­clude Leo Phar­ma, in its piv­otal with tralok­izum­ab, and Anap­tys­Bio in the hunt with a mid-stage pro­gram for etokimab, pre­vi­ous­ly re­ferred to as ANB020.

Mike Grey. Mirum

In $86M IPO pitch, Mirum spells out plans to turn Shire dis­cards in­to or­phan liv­er drug suc­cess­es

Mike Grey doesn’t have any time to waste. Hav­ing re­gained con­trol of two liv­er dis­ease drugs from Shire and po­si­tioned them for piv­otal stud­ies — five years af­ter first hand­ing them off in a deal to sell Lu­me­na, where he was CEO — Grey is steer­ing Mirum straight in­to an IPO with a $86 mil­lion ask.

Not that Mirum has spent much of its $120 mil­lion Se­ries A cash since launch­ing last No­vem­ber. Ac­cord­ing to the S-1, the Cal­i­forn­ian biotech has burned through $23.3 mil­lion as of March, but ex­pects ex­pens­es to pick up once their clin­i­cal work gath­ers steam.

Suf­fer­ing No­var­tis part­ner Cona­tus is pack­ing it in on NASH af­ter a se­ries of un­for­tu­nate tri­al events

The NASH par­ty is over at No­var­tis-backed Cona­tus. And this time they’re turn­ing off the lights.

More than 2 years af­ter No­var­tis sur­prised the biotech in­vest­ment com­mu­ni­ty with its $50 mil­lion up­front and promise of R&D sup­port to part­ner with the lit­tle biotech on NASH — ig­nit­ing a light­ning strike for the share price — Cona­tus $CNAT is back with the lat­est bit­ter tale to tell about em­ri­c­as­an, which once in­spired con­fi­dence at the phar­ma gi­ant.

Dean Hum. Nasdaq via YouTube

Gen­fit goes to Chi­na with a deal worth up to $228M for NASH drug

Fresh off the high of its Nas­daq IPO de­but, and the low of com­par­isons to Cymabay — whose NASH drug re­cent­ly stum­bled — Gen­fit on Mon­day un­veiled an up to $228 mil­lion deal with transpa­cif­ic biotech Terns Phar­ma­ceu­ti­cals to de­vel­op its flag­ship ex­per­i­men­tal liv­er drug — elafi­bra­nor — in Greater Chi­na.

The deal comes weeks af­ter Gen­fit $GN­FT is­sued a fiery de­fense of its dual PPAR ag­o­nist elafi­bra­nor, when com­peti­tor Cymabay’s PPARδ ag­o­nist, se­ladel­par, fiz­zled in a snap­shot of da­ta from an on­go­ing mid-stage tri­al. The main goal at the end of 12 weeks was for se­ladel­par to in­duce a sta­tis­ti­cal­ly sig­nif­i­cant im­prove­ment in liv­er fat con­tent, but da­ta showed that pa­tients on the place­bo ac­tu­al­ly per­formed bet­ter.

Alex­ion wins pri­or­i­ty re­view for Ul­tomiris' aHUS in­di­ca­tion; FDA ex­pands ap­proval of Ver­tex's Symdeko

→ Alex­ion $ALXN has scored a speedy re­view for Ul­tomiris for pa­tients with atyp­i­cal he­molyt­ic ure­mic syn­drome (aHUS) af­ter post­ing pos­i­tive da­ta from a piv­otal study in Jan­u­ary. The drug is the rare dis­ease com­pa­ny’s shot at pro­tect­ing its block­buster blood dis­or­der fran­chise that is cur­rent­ly cen­tered around its flag­ship drug, Soliris, which is a com­ple­ment in­hibitor typ­i­cal­ly ad­min­is­tered every two weeks. Ul­tomiris has a sim­i­lar mech­a­nism of ac­tion but re­quires less-fre­quent dos­ing — every eight weeks. The de­ci­sion date has been set to Oc­to­ber 19. Late last year, Ul­tomiris se­cured ap­proval for noc­tur­nal he­mo­glo­bin­uria (PNH) pa­tients.