It will be hard to top last year’s flurry of biotech companies joining the public markets, but this week is shaping up to be the busiest for life science IPOs in recent memory. Five biotechs priced their IPOs and at least one more is coming.
According to IPO research firm Renaissance Capital, 47 IPOs have priced so far this year across all sectors, down 27 percent compared to the same period in 2018. Just as last year, healthcare IPOs lead the way. To date in 2019, 23 healthcare-related companies have gone public, the most of any sector. Here’s a look at the five biotech IPOs that priced in the past two days.
—Cortexyme raised $75 million for clinical tests of its experimental Alzheimer’s disease drug COR388. The South San Francisco-based biotech sold approximately 4.4 million shares for $17 each Wednesday evening, right at the midpoint of its targeted $16 to $18 price range. Cortexyme shares are expected to begin trading on the Nasdaq Thursday under the stock symbol “CRTX.”
Many of the failed Alzheimer’s drugs of recent years aimed to reduce plaques of amyloid protein on the brain. Cortexyme is targeting a bacterium called Porphyromonas gingivalis, which secretes toxins called gingipains that are found in the brains of Alzheimer’s patients. Animal studies show P. gingivalis infection leads to the brain deterioration characteristic of Alzheimer’s, according to Cortexyme’s filing. The company adds that research shows this deterioration can be treated with a drug that blocks gingipains. Cortexyme will use the IPO cash to fund a Phase 2/3 study enrolling approximately 570 patients who have mild to moderate Alzheimer’s. Preliminary results are expected by the end of 2021.
—Axcella Health, which is developing drugs to treat metabolic disorders, raised $71.4 million. Late Wednesday, the Cambridge, MA, biotech sold approximately 3.5 million shares for $20 apiece, which was the low end of the price range that it had planned. Those shares are expected to begin trading on the Nasdaq Thursday under the stock symbol “AXLA.”
Axcella traces its roots to venture capital firm Flagship Pioneering, which spun it out in 2013 (originally called Pronutria) to develop its amino acids research into new medicines and medical foods. Three years later, the company decided to focus primarily on drugs and changed its name to Axcella. In its prospectus, the company says its drugs are comprised of molecules that affect and regulate metabolism. Lead drug AXA1665 is being prepared for human testing as a treatment for hepatic encephalopathy, a condition in which a damaged or diseased liver produces toxins that move on to the brain and cause cognitive impairment. In its filings, Axcella says it will use the IPO cash to advance its lead drug and two other programs into clinical trials.
—Milestone Pharmaceuticals upsized its IPO, selling 5.5 million shares for $15 apiece, raising $82.5 million. The clinical-stage drug developer had planned to sell 5 million shares in the price range of $14 to $16 each. Montreal-based Milestone, which has a US subsidiary in Charlotte, NC, has advanced lead drug etripamil to Phase 3 testing as a treatment to stop paroxysmal supraventricular tachycardia (PSVT), an abnormality in the heart’s electrical system that leads to a rapid heart rate.
Dosed as a nasal spray, the Milestone drug is intended to work quickly. In Phase 2 studies, the company reported that the drug stopped PSVT within 15 minutes in 87 percent of patients, compared to just 35 percent of patients given a placebo. Milestone says it will use the IPO cash for Phase 3 testing. The company’s shares are expected to begin trading on the Nasdaq Thursday under the stock symbol “MIST.”
—NextCure, a developer immunotherapies for cancer and immune disorders, raised $75 million in its public markets debut. The Beltsville, MD-based biotech sold 5 million shares for $15 each, right at the midpoint of its targeted price range. NextCure has developed a proprietary technology called FIND-IO that discovers drug targets on immune cells.
NextCure’s lead drug candidate, NC318, targets a receptor called Siglec-15 (S15). Last October, NextCure started a Phase 1/2 clinical trial in patients with advanced solid tumors. The Phase 1 part of the study is expected to finish in the fourth quarter of this year; the Phase 2 portion will finish in the fourth quarter of 2020. NextCure says it will use the IPO proceeds to advance NC318 to Phase 3 testing and to advance NC410 into Phase 1/2 testing. In addition to its in-house research, NextCure also has a research partnership with Eli Lilly (NYSE: [[ticker:LLY]]), which last year committed $40 million to the biotech to find new cancer drugs. NextCure’s shares are expected to begin trading on the Nasdaq Thursday under the stock symbol “NXTC.”
—The Trevi Therapeutics (NASDAQ: [[ticker:TRVI]]) IPO was a holdover from last week, and the company had to lower its price target in order to pull it off. New Haven, CT-based Trevi sold 5.5 million shares on Tuesday for $10 each, raising $55 million. The company had initially planned to sell 4.7 million shares in the $14 to $16 price range.
Trevi has developed an extended-release formulation of an old opioid, nalbuphine. The company says it will use the IPO proceeds to fund clinical studies testing its drug for tough-to-treat itching conditions.
—The current wave of biotech IPOs has not yet crested. Applied Therapeutics is expected to price its stock offering Thursday. The company plans to sell 4 million shares in the range of $14 to $16 each.
Applied’s lead drug candidate AT-001 was developed to treat diabetic cardiomyopathy, a fatal scarring of the heart that has no FDA-approved treatment. The company says in its IPO prospectus that its drug was developed to target an enzyme called aldose reductase, whose activity leads to dysregulation of cells and tissues and is associated with multiple diseases. According to the filing, Applied plans to spend approximately $30 million of the IPO proceeds on a pivotal Phase 2/3 study testing AT-001 in diabetic cardiomyopathy.
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