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.

Lyra Ther­a­peu­tics

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%).

Ay­ala Phar­ma­ceu­ti­cals

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

Paul Hudson, Sanofi CEO (Getty Images)

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Dan O'Day, Gilead CEO (Andrew Harnik, AP Images)

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Roger Perlmutter, Merck R&D chief (YouTube)

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