La Jolla Pharmaceutical grossed $125m, Inspyr Therapeutics signs a deal to raise up to $100m, Ionis's Akcea makes $100m IPO plans, and $64m in cash for SutroVax tops recent venture capital rounds.
La Jolla Pharmaceutical Co. with its $125m stock sale led a recent spate of secondary offerings by biopharmaceutical firms as companies attempt to fortify their cash balances before the "Trump bump" in US stock valuations flattens or slumps.
Meanwhile, the slowdown in initial public offerings that cut the number of US first-time offerings in half last year continues in 2017, but one drug developer recently launched an IPO and the Ionis Pharmaceuticals Inc. subsidiary Akcea Therapeutics Inc. has joined the queue. (Also see "US IPOs In Review: Relatively Muted Market In 2016 To Continue In 2017" - Scrip, 30 Dec, 2016.)
The biopharma sector's valuations have fallen from their peak in July 2015, but the sector's stock values jumped after President Donald Trump's inauguration, although that bump from investors anticipating a business-friendly Trump has fallen a bit recently. The Nasdaq Biotech Index (NBI) peaked on July 20, 2015 and fell 33.4% by the end of 2016, but the index has risen by as much as 14.1% in 2017, though as of March 27 it has fallen 3% since this year's peak on March 3.
Raising Cash After Good News, Pipeline Progress
La Jolla Pharmaceutical sold 3.7m shares at $33.50 each on March 23 to gross $125m, which it will use for ongoing research and development expenses, including the submission of a new drug application (NDA) to the US FDA later this year for LJPC-501 in the treatment of hypotension. The San Diego-based company reported positive Phase III results for its synthetic human angiotensin II formulation earlier this year. (Also see "Survival Benefit For Hypotension Shock Drug Nice But Not Needed By FDA, La Jolla Says" - Pink Sheet, 27 Feb, 2017.)
Other recent follow-on offerings were announced after recent milestones for some companies and to capitalize on relatively positive investor sentiment while it lasts:
Inspyr Therapeutics Inc. in Westlake Village, Calif. signed a cash-and-debt agreement with Milost Global Inc. under which the US private equity firm will invest up to $25m in the early-stage drug developer and buy up to $75m in convertible notes. Inspyr will use the proceeds to begin new preclinical studies for lead drug candidate mipsagargin for which a Phase II clinical trial in liver cancer was initiated in January. (Also see "Pipeline Watch: Phase III Starts In MS, Hyperkalemia And Short Stature" - Scrip, 6 Jan, 2017.)
Calithera Biosciences Inc. has been on the rise since it licensed the arginase inhibitor CB-1158 to Incyte Corp. at the end of January and took advantage of its doubling in value on March 22 to sell 6.83m shares at $10.25 each for gross proceeds of $70m. (Also see "Incyte Further Enhances IO Pipeline With Calithera's Arginase Inhibitor" - Scrip, 30 Jan, 2017.)
Adaptimmune Therapeutics PLC had some good news late last year and earlier this year about moving its immuno-oncology pipeline forward and sold 14.3m American depository shares (ADSs) at $4.20 each on March 22 to fund ongoing clinical development. The UK-based company and its partner GlaxoSmithKline PLC initiated a Phase II clinical trial enrolling liposarcoma patients in December for lead candidate NY-ESO Spear T-cells and Adaptimmune said in January that it has US FDA permission to begin testing MAGE-A4 in solid tumors. (Also see "Pipeline Watch: Phase III Results With Tagrisso, Biosimilar Rituximab And Vonvendi" - Scrip, 13 Dec, 2016.) The company also noted in January that GSK selected a second target for development of a cell therapy based on its technology.
Houston, Texas-based Bellicum Pharmaceuticals Inc. grossed $60m from the sale of 5m shares priced at $12 each on March 23 to fund clinical development of its cell therapies, including T cell receptor (TCR) and chimeric antigen receptor T cell (CAR-T) therapies. Phase I studies for the CAR-T candidate BPX-601 and the TCR therapy BPX-701 entered the clinic in late 2016, but the company's Phase II cell therapy BPX-501 – an adjunct to stem cell transplants for inherited blood disorders – is nearing Phase III studies. (Also see "Pipeline Watch: Phase III Read-Outs For Ozanimod, Olaparib And Sapacitabine" - Scrip, 27 Feb, 2017.)
Ionis's Akcea Joins IPO Queue With $100m Offering
Ionis's cardiovascular-focused subsidiary Akcea filed for a $100m initial public offering March 27, with the support of a big pharma backer, Novartis AG. The antisense drug developer did not outline in the S-1 filing how many shares it plans to sell or the price target, but Novartis has committed to a $50m stock purchase.
The shot at the public markets comes at an important time for Akcea, which is close to filing its first wholly-owned drug volanesorsen with the FDA for the treatment of familial chylomicronemia syndrome (FCS). The rare disease, which can result in extremely high triglyceride levels and potentially fatal pancreatitis, affects an estimated 3,000 to 5,000 patients worldwide. Akcea recently released Phase III data for volanesorsen, showing good efficacy with mixed safety results, including frequent instances of reduced platelet counts. (Also see "Akcea Faces Tricky Risk/Benefit Scenario In Orphan Disease FCS" - Scrip, 6 Mar, 2017.) The drug is also in Phase III for familial partial lipodystrophy (FPL).
Ionis has partnered many of its RNA-antisense drug candidates, but held onto the rights to volanesorsen and carved out a cardiovascular subsidiary in 2015 to take the drug and others over the finish line. Akcea has two others in mid-stage development that represent significantly greater commercial opportunities, but will have substantially higher development costs, including expensive cardiovascular outcomes trials. Novartis paid $75m up front in December for an option to license the products, which are AKCEA-APO(a)-LRx and AKCEA-APOCIII-LRx, both in development to reduce cardiovascular risk in patients with lipid disorders. (Also see "Novartis Spreads Cardiovascular Bets with Ionis Antisense Option Deal" - Scrip, 6 Jan, 2017.)
Now Akcea is preparing to move into a new phase as a commercial-stage biopharma. The company expects to file an NDA for volanesorsen with FDA in the third quarter. Ionis CEO Stanley Crooke talked about the early commercialization strategy for Akcea during an interview at the J.P. Morgan Healthcare Conference in January. (Also see "Ionis: Another Shot At The Commercial Market And Sustainable Profits" - Scrip, 6 Feb, 2017.) Akcea’s CEO Paul Soteropoulos joined the company in January 2015 from Moderna Therapeutics LLC.
There have been five therapeutics company IPOs in the US this year, including one that launched last week. The Israeli firm Therapix Biosciences Ltd. listed its shares on Nasdaq in the US with the March 22 sale of 2m ADSs priced at $6 each to gross $12m, which will fund formulation and development work for the company's two lead drug candidates, including clinical trials.
Therapix is repurposing the FDA-approved synthetic cannabinoid dronabinol as the drugs THX-TS01 for Tourette syndrome and THX-ULD01 for mild cognitive impairments. The company already trades on the Tel Aviv Stock Exchange. (Also see "Tourette’s Syndrome – Hit and Miss For Psyadon and Neurocrine" - Scrip, 23 Jan, 2017.)
SutroVax's Series B Brings Its VC Total To $86m
SutroVax Inc. closed a $60m Series B venture capital round led by new investors Frazier Healthcare Partners and Pivotal bioVenture Partners with participation from prior investors Abingworth, Longitude Capital, Roche Venture Fund and CTI Life Sciences Fund. Prior investors simultaneously put another $4m into the vaccine developer on top of the Series B round. That brings the company's VC investment to date to $86m, including its $22m Series A round in 2015. (Also see "Oncobiologics raises $31m for biosimilars; RaNA, Ra, SutroVax add VC cash" - Scrip, 27 Jul, 2015.)
Foster City, California-based SutroVax – a spinout from Sutro Biopharma Inc. – is developing conjugate vaccines and complex antigen-based vaccines. The company will use its Series B cash to advance its lead pneumococcal conjugate vaccine (PCV) into the clinic and to accelerate antigen discovery in other disease areas for new vaccine candidates. The broad spectrum PCV has generated preclinical proof of concept in studies against approved pneumococcal vaccines.
Other recent significant venture capital financings include:
UK-based Pulmocide Ltd. revealed a $30.4m Series B round on March 20 to fund development of inhaled therapies for respiratory viral and fungal infections. (Also see "Inhaled Anti-Infectives With Extended Lung Retention: Pulmocide Secures Cash To Fund Trials" - Scrip, 20 Mar, 2017.)
BioClin Therapeutics Inc. in San Ramon, California said on March 22 that it closed a $30m Series B round led by new investors Sofinnova Ventures and Ysios Capital with participation from existing investors HealthCap, Life Sciences Partners and Tekla Capital Management, bringing the total funding raised to date to $59m. The proceeds will be used to expand an ongoing Phase Ib/II clinical trial for B-701 plus docetaxel in metastatic bladder or urothelial cancer and to start a Phase Ib/II trial for B-701 plus Roche's Tecentriq (atezolizumab) in those indications. The monoclonal antibody targets fibroblast growth factor 3 (FGFR3). An investigator-sponsored study of B-701 plus Merck & Co. Inc.'s Keytruda (pembrolizumab) is ongoing in metastatic urothelial cancer.
PureTech Health PLC licensed two clinical drug candidates targeting the mechanistic target of rapamycin complex 1 (mTORC1) pathway from Novartis and launched a subsidiary called resTORbio to focus on immunosenescence (age-related decline in immune function) and to develop the two drugs, which have been tested in hundreds of elderly patients in Phase IIa trials. PureTech committed $15m in initial capital, which will give it a 58% stake in resTORbio, and may invest up to $10m more to get to an ownership stake of 67%. Novartis will have an equity stake in resTORbio and it will earn milestone fees and royalties from the PureTech subsidiary's two development programs.
The French firm Advicenne SA closed a €16m ($17.4m) financing round to fund pediatric drugs for orphan renal and neurological diseases, including completion of a Phase III program for ADV7103 in the treatment of renal tubulopathy with final results expected in the summer of 2017. The company also will move ADV7103 into development for a second indication and pursue registration of the pediatric anesthetic ADV6209, which was licensed to Primex Pharmaceuticals AG. (Also see "Primex Nears Market With Oral Pediatric Sedation Solution" - Scrip, 7 Sep, 2016.) IRDI SORIDEC Gestion, Cemag Invest and MI Care led the financing with participation from existing investors InnoBio (Bpifrance), IXO Private Equity and private individuals. Advicenne has raised €30m to date.
[Editor’s note: For more information about these and other venture capital financings look out for the April edition of the monthly venture funding column provided by our colleagues at Strategic Transactions. See the March edition covering deals in January and February here.]