Trifecta of clinical stage biotechs unveil IPO plans, braving Wall Street's coronavirus panic
Coronavirus fears precipitated a rout on global stock prices on Monday, but three clinical-stage biotechs are soldiering on with plans to make public debuts. The biggest is Zentalis Pharmaceuticals — which is gunning for a $100 million IPO, three months after an $85 million round of financing.
Founded in late 2014, the oncology company emerged out of stealth in late 2019 with the Series C round. So far the company has raised about $162 million in gross proceeds.
Zentalis’ lead drug, ZN-c5, is a treatment for estrogen receptor-positive, human epidermal growth factor receptor 2-negative, or ER+/HER2-, advanced or metastatic breast cancer. In 2018, the company signed a deal to test the drug in combination with Pfizer’s Ibrance — data from this study, and the monotherapy Phase 1/2 trial, are expected later this year.
The New York-based company also has ZN-c3, currently in a Phase I/II trial under investigation for use in advanced solid tumors — in addition to ZN-d5, initially being developed for the treatment of hematological malignancies; and ZN-e4, currently in a Phase I/II trial under evaluation for use in advanced non-small cell lung cancer.
The company — which is run by longtime venture capitalist Anthony Sun — counts Alexandria Real Estate Equities, Eventide Asset Management, Farallon Capital, HighLight Capital, Matrix Capital Management, Mayo Clinic, Perceptive Advisors, Pharmaron, Redmile Group, Surveyor Capital (a Citadel company), Tybourne Capital Management and Viking Global Investors as its shareholders.
With the promise of an implant developed by MIT’s Bob Langer and Harvard’s George Whitesides, ear, nose, and throat disease-focused Lyra Therapeutics on Friday divulged its plans to leap on to the Nasdaq with a $57.5 million IPO, less than two years after scoring $29.5 million in a Series B round of financing.
Led by Boston Scientific veteran Maria Palasis, Lyra’s drug delivery technology, which was originally meant to target peripheral artery disease, offers the scope of delivering existing medications to affected tissue for sustained periods with a single administration.
Its lead experimental products (LYR-210 and LYR-220) are designed to help patients with chronic rhinosinusitis (CRS), a condition in which the spaces inside the nose and sinuses are swollen and inflamed — resulting in a perpetually stuffy nose and breathing difficulties — for three months or longer, despite standard treatment with a steroid spray. Some patients even consider surgery so the spray can have better access to the affected tissue.
Lyra’s implants are placed deep into the sinonasal passages, and slowly release the steroid mometasone furoate over six months — using this method, the drug gets closer to the affected areas, stays in place for a sustained period of time and eliminates any compliance issues, the company contends.
LYR-210 is currently in a mid-stage study called LANTERN evaluating the safety and efficacy of the product in up to 150 surgically-naïve CRS patients who have failed previous medical management. Data from this study are expected in the first quarter of 2021. LYR-220 is being developed for use in CRS patients who continue to require treatment to manage symptoms despite having had sinus surgery — a proof-of-concept study is planned for next year.
Entities affiliated with Perceptive Advisors own about a third (32.4%) of the company, while other big shareholders include entities affiliated with North Bridge Venture Partners (17.3%), entities affiliated with Polaris Venture Partners (16%), RA Capital Healthcare Fund (9.6%) and Intersouth Partners VII (7.9%).
Another mid-stage biotech — cancer-focused Ayala Pharmaceuticals — disclosed its plans for an IPO on Friday.
The Israel-based company, which is working on treatments for rare and aggressive cancers, primarily in genetically defined patient populations, is looking to make its debut with a $50 million IPO. Ayala’s focus is primarily on targeting the aberrant activation of the Notch pathway, which is implicated in regulating cell proliferation, cell fate, differentiation, and cell death as well as drug resistance. Its pipeline of products is designed to inhibit gamma-secretase — the enzyme responsible for Notch activation.
The company’s lead experimental drug, AL101, was in-licensed from Bristol Myers Squibb (BMS) in 2017, although the gamma-secretase inhibitor failed to induce a statistically significant improvement in an early-stage study in patients with various types of cancer. But Ayala’s faith in the compound is based on data that showed clinical activity in patients with cancers in which Notch was implicated as a tumorigenic driver.
AL101 is being investigated as a monotherapy in an open-label Phase II trial as a treatment for recurrent/metastatic adenoid cystic carcinoma in patients bearing Notch-activating mutations. The drug is also evaluated as a therapy for certain patients with triple-negative breast cancer and a rare form of T-cell specific leukemia.
The company’s second drug-in-development was also created at BMS. The therapy is being developed to treat rare, disfiguring and often debilitating types of soft tissue tumors called desmoid tumors, while Novartis has signed on as a partner to investigate its use in multiple myeloma.
Founded in 2017, the company has raised $46.3 million thus far. Its shareholders include BMS, Novartis as well as Israel Biotech Fund, aMoon Fund, Harel Insurance and Finance, and SBI Investments.
Social image: Maria Palasis, Lyra Therapeutics