December 30, 2014
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Boston biotech darling FlexPharma will take a run at the public market, saying in a filing with U.S. Securities and Exchange Commission Monday that it will attempt to raise $60 million for an initial public offering of its cramp and spasm therapeutics company.
Flex Pharma was launched less than a year ago but has become a favorite with investors from the sports world’s inner circle, including Kraft Group, which owns the New England Patriots, and the owners of the Boston Celtics Wyc Grousbeck and Steve Pagliuca.
Flex Pharma is based in Back Bay, Mass. and has already seen a $41 million funding injection from well-known venture capitalists including Bessemer Venture Partners, Bindley Capital Partners, CD-Venture, Alexandria Equities, Lightstone Ventures, Jennison Associates and EcoR1 Capital.
The company said it plans to list on the NASDAQ under the symbol FLKS but did not disclose pricing terms. Flex Pharma initially filed confidentially on Oct. 29 but is joining a parade of winter biotech IPOS including Carbylan and Tracon trying to cash in on what may be a quickly waning biotech bull market. Jefferies and Piper Jaffray are the joint bookrunners on the deal.
So far Flex Pharma has focused on research and dietary supplements that attempt to target the excessive firing of neurons in the spinal cord that control muscle contraction. It has a timeline for market introduction of its products in 2016.
“There are a number of well-known sports drinks and other consumer products used to prevent [exercise-associated muscle cramps],” Flex Pharma said in its filing. “However, we do not believe any of these products have been proven to be clinically effective in preventing [the problem]”.
Public filings have shown Flex Pharma lost more than $4 million in the 10 months since it was founded, a not uncommon financial situation for young startups with massive overhead and very little existing infrastructure. If it can convince large biopharma companies that it’s a smart bet with a proprietary pipeline, however, those costs can easily be defrayed by a splashy IPO or lucrative exit.
