4 Biotech Companies Trying to Launch IPOs Before Another Possible Government Shutdown
The government shutdown threw a wrench into several biotech companies' plans for initial public offerings (IPOs). Although the government is only guaranteed to stay open until February 15, several biotechs are working to get their IPOs launched in that window. Here’s a look.
Alector. Based in South San Francisco, Alector’s IPO launched yesterday, selling 9.25 million shares priced at $19 each. Alector works in the intensely volatile area of Alzheimer’s disease drugs. Science is increasingly viewing Alzheimer’s as an immune disease, with brain immune cells called microglia malfunctioning. Microglia nourish neurons while also clearing cellular debris and harmful proteins—such as the beta-amyloid proteins that are typically associated with the early stages of the disease and tau proteins, which generally accumulate later in the disease.
The company launched a Phase I trial of AL002 for Alzheimer’s disease in November 2018. AL002 targets a triggering receptor found on myeloid cells 2 (TREM2), which was identified in genomic studies of Alzheimer’s disease patients. The drug is part of a global strategic partnership with AbbVie.
The company’s IPO raised $176 million, which gives the company a market value of about $1.3 billion. It is reportedly the first U.S. IPO since the 35-day government shutdown. The money will be used to fund research for AL001, an experimental drug for frontotemporal dementia, which is in a Phase I dose-ascending trial. It hopes to move to a Phase Ib proof-of-mechanism trial in the first half of this year and then a Phase II in the first half of 2020.
Gossamer Bio. Gossamer Bio has been the poster child for biotech companies struggling with IPO launches during the shutdown. The company launched in 2018 with $100 million in financing. It raised another $230 million since then. Then, it initially filed with the U.S. Securities and Exchange Commission (SEC) for its IPO on Dec. 21, 2018, the day before the U.S. federal government shut down.
With the government shutdown, the SEC’s automated website was accepting IPO registration, but the review wasn’t occurring. As the shutdown dragged on for a record 35 days, a number of companies that had filed IPOs began considering alternate approaches using a loophole. One such approach was to change the language of the registration filing and skip over the rest of the SEC review, going directly to market. The company picks its IPO prices and waits 20 days. Then the listing is fixed at that price.
On Jan. 23, Gossamer filed for the alternate IPO path. In it, the company proposed selling about 16.5 million shares, as well as about 2.2 million shares to underwriters, at $16 each. That path locked the price for 20 days. However, two days later, Trump agreed to open the government for three weeks.
On Jan. 30, Gossamer Bio announced it had filed an amended Form S-1 with the SEC, restoring the amended language and picking the traditional pathway. The IPO terms are unchanged, but it is requesting accelerated review of the IPO paperwork to allow it to go public before the 20-day date its amended offering would have automatically become effective.
Gossamer Bio plans to use the funds raised from the IPO to advance its clinical trials, including one for its lead candidate, GB001. GB001 is an oral therapeutic for a difficult-to-treat type of eosinophilic asthma. The drug, a DP2 antagonist, is also being developed as a potential treatment for chronic rhinosinusitis with nasal polyps and chronic spontaneous urticaria. Phase II trials are planned for both later indications, while a Phase IIb is currently in progress for eosinophilic asthma.
Harpoon Therapeutics. Based in South San Francisco, Harpoon filed for its IPO on December 27, 2018. The company is focused on developing a novel class of T-cell engagers for cancer and other diseases. On Jan. 2, 2019, it announced preliminary safety and mechanism-of-action findings from its ongoing Phase I trial of HPN424 in patients with progressive metastatic castration-resistant prostate cancer (mCRPC).
The company’s IPO filing came about a month after it closed on a $70 million financing round. It hopes to initiate clinical trials on its second product candidate, HPN536, in the first half of 2019. This is being developed for ovarian cancer and other mesothelin-expressing solid tumors.
In 2017, Harpoon entered into an immuno-oncology research deal with AbbVie, with plans to incorporate Harpoon’s TriTAC platform with AbbVie’s research-stage immuno-oncology targets.
The company hopes to raise $76 million. It’s IPO is scheduled for Friday, February 8. It is issuing 5,400,000 shares in a price range of $13 to $15 per share.
Anchiano Therapeutics. Based in Cambridge, Mass. and Jerusalem, Israel, Anchiano filed its IPO on Jan. 7, 2019. The company focuses on cancer therapies. Its lead program is gene therapy, inodiftagene vixteplasmid, for early-stage bladder cancer. So far it has been evaluated in six clinical trials. The company is publicly traded on the Tel Aviv Stock Exchange.
On Dec. 18, the company announced it had launched Codex, its pivotal Phase II trial of inodiftagene vixteplasmid.
The company hopes to raise $35 million. This involves selling 2.4 million American Depositary Shares (ADSs) representing five common shares each at a midpoint of $14.55 per share. The plan to use about 75 percent of the net proceeds to advance its Phase II program for its lead product candidate. Its expected trade date is Feb. 12.