Boston’s Rhythm Withdraws $86 Million IPO Citing Acquisition Agreement With Actavis
October 30, 2014
By Krystle Vermes, BioSpace.com Breaking News Staff
Rhythm Pharmaceuticals, a clinical-stage biotechnology company responsible for developing injectable therapies for gastrointestinal diseases, decided to withdraw its initial public offering on Oct. 29.
This comes just a week after the company signed an agreement with Actavis that gave it an option to acquire Rhythm.
Rhythm initially filed for an IPO back in August. Citigroup and Cowen and Company were to act as the joint book-running managers for the offering. The number of shares to be offered and price range were not released at the time of the announcement.
However, Rhythm announced on Oct. 22 that Actavis, a global specialty pharmaceutical company, had beengranted an exclusive option to acquire Rhythm’s wholly owned subsidiary, Rhythm Health, Inc. The subsidiary is responsible for developing relamorelin, or RM-131, a peptide ghrelin agonist for the treatment of diabetic gastroparesis and other GI disorders.
“This is a very positive partnership for both companies, and also potentially for patients with diabetic gastroparesis who have not had a new therapy for gastroparesis approved in the U.S. for more than 30 years,” said Keith Gottesdiener, CEO of Rhythm. “This agreement leverages Actavis’ commitment and capabilities for gastroenterology drug development and commercialization, and so we are very pleased to work together on the upcoming Phase 2b study for relamorelin.”
Relamorelin, a Phase 2 ghrelin, is derived from the natural ghrelin sequence. It has completed a Phase 2 trial in diabetic gastroparesis and a Phase 2a study in chronic constipation. Additionally, the U.S. Food and Drug Administration has granted Fast Track review to the drug for the treatment of diabetic gastroparesis, which affects 24 million diabetics in the U.S.
“The option to acquire Rhythm Health, Inc. and its relamorelin development candidate demonstrates our commitment to identify unique opportunities and, through innovative business initiatives, expand our potential product franchises in core therapeutic categories,” said David Nicholson, senior vice president of Global Brands Research and Development at Actavis.
“Relamorelin has the potential to be a significant new advance in the treatment of gastroparesis and other GI functional disorders where there is an urgent need for better therapies, particularly drugs like relamorelin that have a prokinetic mechanism of action," he said. "If successful in development, relamorelin could provide a significant addition to our GI family, which currently includes Linzess, Delzicol/Asacol, Carafate, Canasa, Pylera and Rectiv, and for which we are currently developing eluxadoline, the product opportunity acquired earlier this year with our acquisition of Furiex Pharmaceuticals .”