April 7, 2015
By Riley McDermid and Mark Terry, BioSpace.com Breaking News Staff
San Diego-based aTyr Pharma Inc. announced Tuesday that it will take a run at the public markets, filing an S-1 form with the U.S. Securities and Exchange Commission for an initial public offering of $86 million.
The company said it hopes to list on the NASDAQ Global Market under the symbol “LIFE,” and that J.P. Morgan Securities and Citigroup Global Markets act as bookrunners on the deal. BMO Capital Markets will act as a lead manager for the proposed offering and William Blair & Company act as a co-manager for the proposed IPO.
That announcement comes a week after aTyr said that it had successfully completed a Series E financing round totaling $76 million. The round was led by Sofinnova Ventures and an undisclosed large institutional investor.
Other new investors included funds and accounts advised by T. Rowe Price Associates, Inc., Federated Investors, Inc., Deerfield, Rock Springs Capital Management, EcoR1 Capital and others.
In addition, the company added Srinivas Akkaraju, a general partner at Sofinnova Ventures, to the company’s board of directors. Akkaraju is or has been active on numerous other boards, including Eyetech Pharmaceuticals, Intercept Pharmaceuticals , Seattle Genetics, Inc. and others.
The news from aTyr comes a day after new data from the Exit Poll report by Thomson Reuters and the National Venture Capital Association shows that initial public offerings dropped 54 percent during the first quarter of 2015, with a 58 percent decrease in dollars invested in the 17 offerings, 13 of which were life sciences IPOs.
Overall, the 17 venture-backed IPOs raised $1.4 billion during the first quarter of 2015, with life sciences IPOs representing 76 percent of total listings in the first quarter.
“This quarter marked the first quarter to see less than 20 venture-backed IPOs since the first quarter of 2013,” said the report.
“For the first quarter of 2015, 86 venture-backed M&A deals were reported, 16 of which had an aggregate deal value of $2.1 billion. Venture-backed M&A activity during the quarter fell to its lowest levels, by number of deals and disclosed value, since the first quarter of 2013.”
aTyr focuses on physiocrines which are extracellular signaling molecules. They apparently play a role in modulating physiological changes and in some cases, their absence is linked to human genetic diseases.
“The proceeds from this financing, led by top-tier biotechnology institutional investors, will help support the development of our lead clinical candidate Resolaris and its Phase Ib/II trial for patients with facioscapulohumeral muscular dystrophy (FSHD), as well as expansion to additional indications,” said John Mendlein, company chief executive and executive chairman in a statement.
In the 10 years since aTyr was founded, it has raised at least $184 milllion. Analysts are speculating that with all this cash coming in, the company may be leading up to an initial public offering (IPO).
The company isn’t saying much more than that the funds will mostly go toward its Resolaris program, which is currently in Phase Ib/II trial.
On Feb. 18, 2015, aTyr announced that the European Commission (EC) had granted Resolaris orphan drug designation for the treatment of facioscapulohumeral muscular dystrophy. The drug is a first-in-class intravenous protein therapeutic for rare myopathies that have an immune component.
FSHD is a neuromuscular disease that results in the progressive loss of skeletal muscle. In this specific type of muscular dystrophy, it usually affects across the facial, back and upper arm muscles. Often also effected are the legs and hip girdle. The muscle weakness is often asymmetrical, affecting only one side of the body.
“Our mission is to develop medicines that will make a meaningful difference to patients impacted by debilitating rare diseases,” said Mendlein in a statement. “We are very pleased that the EMA has recognized the potential of Resolaris for patients suffering from FSHD. The Agency’s decision is an important advancement for our promising Physiocrine-based medicines, and marks a key milestone in our strategy to deliver Resolaris to address the unmet needs of patients with this rare disease.”
Companies looking to IPO may follow aTyr’s lead, or they may decide to wait, after biotech’s boom continues to correct.
It’s been a rocky ride on the capital markets as well, with the some exchange-traded funds, like iShares Nasdaq Biotechnology Index Fund losing as much as 2.23 percent during the past week alone. Those loses have trimmed a nearly three-fold gain in the NBI since 2012, and may be indicative of investor caution as venture capitalists sit on the sidelines and wait for volatility to die down.
“With such a blistering pace for venture-backed exit activity in 2014, it was only a matter of time before we saw a drop activity. Despite the decline in venture-backed IPOs for the quarter, a lot of promising young companies made their debut on the public markets with many more waiting in the wings,” said Bobby Franklin, president and chief executive of NVCA.
There were also a few notable pull-outs from companies that decided to wait until the market was at a higher point, a common tactic used by corporate boards to make sure their IPO gets the maximum amount of value possible. Among those were Koltan Pharmaceuticals and Israeli company PolyPid Ltd. , which in a terse statement the Petach Tikva, Israel-based firm said it would withdraw its plans for the $20 million IPO, which had been priced at a range of $10 to $12 a share.
There had been rumors that a recent selloff in the biotech sector, which has dropped 7 percent the last week in March, and thus would have value the company at a lower amount, pushed PolyPid to pull its IPO. But Asaf Bar, chief business officer, told the Wall Street Journal other factors were in play.
“We were very confident with our ability to go public even with the market conditions,” he said. Bar added the company will wait for its pipeline milestones in the second half of 2015 before attempting another IPO.
Cheerleaders for the industry also remained sanguine about the near halving of the offerings on tap last quarter, saying that with investment happening at such a rapid and unprecedented clip in 2015, some pullback was inevitable—though likely not permanent.
“With 54 venture-backed companies having already filed publicly for IPOs and many more confidential registrations already in place, we are optimistic that the pace for venture-backed exits will pick up steam as the year moves ahead, creating opportunities for everyday investors to be shareholders of innovation,” said Franklin.
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