Deals, IPOs

Takeda-backed Mersana joins the biotech IPO queue with a $75M offering and ambitious plans for ADC tech

A little more than a year after an ambitious Takeda came in with a $1 billion-plus package to collaborate with Mersana on its antibody/drug constructs, the Cambridge, MA-based biotech has pulled the trigger on a $75 million IPO.

The offering follows a collaboration with Merck KGaA as well, which was also attracted to the biotech’s boast that it can create ADCs to go after diseases that are currently beyond the reach of the current generation of armed antibodies.

Their lead drug is XMT-1522, which is targeted at HER-2 positive breast cancer. Coming in behind that is the preclinical XMT-1536, is a Dolaflexin ADC targeting NaPi2b-expressing tumors.

As Mersana CEO Anna Protopapas likes to point out, the biotech’s platform tech employs a unique linker technology to connect an antibody with 12 to 15 drugs. Current ADC tech,  she says, is typically limited to three or four drugs in the payload. And Mersana, which has been working with the antibody experts at Adimab, has added proprietary treatments to the mix.

That added firepower should make this drug more efficacious than the drugs currently on the market, says Protopapas, while greatly expanding its range.

“We are efficacious in tumors that express HER-2, but at very low levels,” the CEO told me in early 2016. That gives this drug the potential to treat a much larger patient population. Investigators for the company say this approach has promise for breast, gastric and non-small cell lung cancers.

The S-1 reveals that Merck KGaA paid $12 million upfront to start their preclinical work, adding a $2 million milestone with $778 million up for grabs. That all fits in perfectly with a discovery-stage deal.

Now in Phase I with the lead, Mersana is attempting to hit the public markets at an early stage. But a string of new biotech IPOs – including a couple of hits for biotechs like BioHaven – have helped inspire more companies to jump into the queue.

According to the S-1, NEA — in this case represented by David Mott — holds the lead position among this biotech’s investors, with 41% of the equity. Pfizer comes in second with 11.6% and F-Prime holds 9.9%. Protopapas has a 3% stake in the company.


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