Three biotechs hunt $336M-plus in a new round of IPOs — while Dermavant pulls back
Raise money when you can, not when you must — the common refrain rang loud in two IPO filings late Friday as ADC Therapeutics and Frequency Therapeutics looked to top up their recent raises with mega IPOs.
But when you can’t, as Dermavant found after a second try, then quitting might be imperative.
ADC and Frequency were joined by little cancer biotech Aprea Therapeutics, seeking a collective $336 million from Wall Street.
ADC Therapeutics: $558M and counting
Lausanne, Switzerland-based ADC Therapeutics is gunning for $150 million as it plots two pivotal trials for its signature and namesake antibody-drug conjugates. ADCT-402, which targets CD19, is being evaluated in relapsed or refractory diffuse large B-cell lymphoma; ADCT-301 hits CD25 and is being tested in stubborn cases of Hodgkin’s lymphoma. Assuming positive results, the company envisions BLA submissions in late 2020 and the first half of 2022, respectively.
The SEC filing arrives two months after CEO Chris Martin brought the total haul so far to $558.6 million by adding $103 million to a mammoth $200 million Series E.
ADC’s pitch centers around a next-gen approach to combining an antigen-binding antibody with a cytotoxic payload, with the promise that its pyrrolobenzodiazepine (PBD) warheads are “approximately 100 times more potent than warheads used in currently marketed ADCs.”
With a new infusion, the company plans to see two more early trials to fruition, including the CD22-targeting ADCT-602 for acute lymphoblastic leukemia and the AXL-targeting ADCT-601 for solid tumors. Scaling up of commercial operations, alongside manufacturing plans, will also begin in earnest.
Chairman Peter Corr and board member Stephen Evans-Freke stand to reap the biggest rewards from the IPO, having secured a 42.7% stake through their private equity firm Auven Therapeutics Management. HPWH, a stock corporation tied to Swiss business Hans-Peter Wild, controls 11.6% while AstraZeneca claims 7.1%.
Martin, who was credited for spinning off ADC from Spirogen after he sold that venture to AstraZeneca, holds 2.2% of the stock. CFO (and ex-CEO) Michael Forer has 1.7%.
Frequency tunes in on $100M IPO
It has taken David Lucchino 2.5 years and $61.8 million to steer Frequency out of stealth mode into a public debut $FREQ, for which he’s set a $100 million goal.
Lucchino, the CEO, and CSO Christopher Loose co-founded the biotech with Robert Langer back in 2014 based on the progenitor cell activation tech invented by the illustrious MIT researcher and Jeff Karp, a collaborator from Harvard. The trio had previously launched a medtech venture together that ultimately sold for $30 million upfront.
The PCA platform is designed to generate small molecules that spur regeneration of target cells. By tinkering with local progenitor cells that are pre-programmed to serve the purpose, the biotech believes it can offer a safer and more efficacious alternative to stem cell therapies.
Frequency is starting out with hair cells in the inner ear. Its lead drug candidate, FX-322, is in a Phase IIa trial with top-line data expected in H2 2020. Astellas has bought into ex-US development and commercialization rights in a $625 million deal — $80 million upfront — announced in July. Soon afterwards, the Woburn, MA-based biotech raised $62 million in Series C cash.
An IND for the next program, one for multiple sclerosis, is planned for the second half of 2021, according to the S-1.
In 2018 Lucchino took home a compensation package worth $743,700, while Loose got $578,134. Carl LeBel, the chief development officer, received $477,721.
Perceptive owns the largest chunk of shares at 7.8%, while Taiwania Capital Management Corporation and Alexandria’s Joel Marcus each hold about 5%.
Aprea: All eggs in the p53 basket
In the midst of recruiting for its first pivotal trial, Aprea Therapeutics has penciled in $86 million for that and other programs around its lead drug, APR-246.
The Swedish company has all its eggs in the p53 basket as the protein is expressed from TP53, a gene prone to mutations in cancer. APR-246, which is designed to reactivate mutant p53, is first directed to myelodysplastic syndromes in a combo with chemo. Both the FDA and the EMA have granted orphan status, with European regulators extending that designation to acute myeloid leukemia and ovarian cancer.
David Sallman of Moffitt Cancer Center is a key collaborator in the US, scheduled to give the final word on complete response rates from a Phase I/II study. Pierre Fenaux is leading another study in France, which is also cited to support the upcoming Phase III (readout slated for 2020).
Also expected in 2020: an IND for APR-458, an oral p53 reactivator.
That approach has attracted some high-profile investors, all of whom are featuring prominently as principal stockholders: Karolinska Development (17.21%), Versant (17.73%), 5AM Ventures (17.73%), HealthCap (14.77%), Redmile Group (13.15%) and Sectoral Asset Management (10.35%). CEO Christian Schade keeps 3.65%.
Aprea counts around $60 million in cash and cash equivalents.
Dermavant finally gives up on IPO
Vivek Ramaswamy’s dermatology-focused biotech offshoot first filed for an IPO in March but postponed a listing in June. Three months later, Dermavant has quietly conceded that $100 million raise is not happening any time soon by officially withdrawing.
Dermavant was not identified among the five Vants that Sumitomo Dainippon gained control of just a few days ago, but the $3 billion cash deal does give the Japanese pharma an option to buy up to six other startups under the Roivant umbrella. Two public companies — Myovant and Urovant — were included in the pact.
Following Ramaswamy’s strategy for spinning off themed companies, Dermavant acquired tapinarof, a PhIII-ready psoriasis drug, from GSK. Todd Zavodnick was recruited as CEO after Jackie Fouse left for Agios.
The last capital infusion for Dermavant happened last August when NovaQuest Capital Management provided $100 million “in exchange for conditional milestone payments achieved by tapinarof.”