Finance Watch: One Week Of IPOs Total $818.2m

Relay raises $400m to kick off July’s second big week of US initial public offerings. Also, Ocumension and Immunotech launch Hong Kong IPOs, Amgen invests $421m in BeiGene’s $2.08bn offering, Cytokinetics gets up to $400m in deal and investment funding, and Imvax closes $111m series C round.

Relay Therapeutics, Inc. had the third-largest biopharmaceutical initial public offering in the US in 2020 when it sold 20 million shares at $20 each to gross $400m. It was the first of four IPOs by drug developers on the Nasdaq during the week of July 13 to 17, followed by Berkeley Lights Inc., ALX Oncology, Inc. and Pandion Therapeutics, Inc. The four offerings raised a combined $818.2m.

In recent IPOs outside the US, two Chinese firms also launched significant first-time offerings this month. Ocumension Therapeutics, developing therapies for ophthalmic diseases, grossed HK$1.56bn ($200.3m) from the sale of 105.93 million shares at HK$14.66 each on the Hong Kong Stock Exchange (HKEX) on 10 July. The South China Morning Post reported on 13 July that Immunotech Biopharm also launched an IPO on the HKEX, grossing HK$1bn ($129m) for its lead program in liver cancer.

Ocumension licensed EyePoint Pharmaceuticals, Inc.’s Dexycu (dexamethasone) for post-operative inflammation after ocular surgery for development and commercialization in mainland China, Hong Kong, Macau and Taiwan in January. (Also see "Asia Deal Watch: China’s BravoVax, US-based GeoVax Team Up On Coronavirus Vaccine" - Scrip, 31 Jan, 2020.) It acquired rights to Nicox SA's Zerviate (cetirizine) for allergic conjunctivitis in the same markets in March 2019. (Also see "Asia Deal Watch: Zogenix Partners Japanese Rights To Pediatric Epilepsy Therapy To Nippon Shinyaku" - Scrip, 20 Mar, 2019.) It obtained similar rights to Nicox’s glaucoma candidate at the end of 2018. (Also see "Asia Deal Watch: Innovent Picks Up Asian Rights To Three Clinical Cancer Candidates From Incyte" - Scrip, 20 Dec, 2018.) 

In the US, Relay launched with $57m in series A venture capital financing in 2016 and a $63m series B round at the start of 2018 before it closed a whopping $400m series C round at the end of 2018. (Also see "Finance Watch: Relay Raises $400m – And It's Only The Third-Largest Biopharma VC Round Of 2018" - Scrip, 20 Dec, 2018.) The company proposed the sale of 20 million shares at $18 to $19 each on 15 July and launched the offering at $20 per share later that day. 

Cambridge, MA-based Relay specializes in the visualization of proteins in motion and how that behavior relates to protein function and identify hard-to-target binding sites for novel drugs. The company’s initial focus is small molecule cancer drugs and its lead program is the SHP2 inhibitor RLY-1971, which is being tested in a Phase I dose escalation study in solid tumors. 

Berkeley Lights proposed the sale of 7.4 million shares at $16 to $18 each on 13 July and revised its price range to $19 to $20 on 16 July before launching its IPO later that evening with the sale of 8.1 million shares at $22 each to gross $178.2m. The Emeryville, CA-based company’s technology platform is designed to accelerate the development of antibody therapeutics. 

ALX Oncology in Burlingame, CA suggested on 13 July that it would sell 8 million shares at $15 to $17 each but took its IPO to market with 8.5 million shares at $19 each to gross $161.5m. The company closed a $105m series C round in February and will use its IPO proceeds to fund development of therapies that target the CD47 checkpoint pathway and bridge the adaptive and innate immune systems. ALX plans to expand ongoing clinical development of its lead candidate ALX148 into the treatment of myelodysplastic syndromes and multiple solid tumors. (Also see "Venture Funding Deals: ALX Oncology, Transcenta Break $100m Barrier With Recent Rounds" - Scrip, 3 Mar, 2020.)

Watertown, MA-based Pandion first proposed the sale of 5.5 million shares at $16 to $18 on 13 July but upped the offering to 7 million shares on 16 July before launching its IPO later that night with 7.5 million shares at $18 each to gross $135m. The company is developing modular proteins and bifunctional therapeutics for the treatment of autoimmune diseases, including the interleukin-2 (IL-2) mutein PT101 for ulcerative colitis that is being evaluated in a Phase I clinical trial. It closed an $80m series B round on 1 April. (Also see "Finance Watch: iTeos, Pandion And Aspen Show COVID-19 Hasn’t Slowed VC Deals Yet" - Scrip, 1 Apr, 2020.)

The Relay, Berkeley Lights, ALX and Pandion IPOs bring July’s total to seven first-time offerings in the US after Poseida Therapeutics, Inc., Nkarta, Inc. and Inventiva S.A. raised $583.7m on 9 and 10 July. (Also see "Finance Watch: Poseida, Nkarta And Inventiva Are July’s First Biopharma IPOs" - Scrip, 10 Jul, 2020.)

The 29 biopharma firms that went public in the US during the first half of 2020 raised $7.2bn and generated an average return of 77.1% for IPO investors. (Also see "IPO Update: High-Flying Biopharma IPOs Average 77.1% Return Through Q2" - Scrip, 30 Jun, 2020.)

Amgen Invests $421m In BeiGene’s $2.08bn RDO

Beijing-based BeiGene, Ltd. closed a registered direct offering (RDO) of 145.8 million ordinary shares at $14.2308, which was equivalent to $185 per American depository share (ADS), to certain existing investors, including Amgen, Inc. 

Amgen paid $2.7bn at the end of 2019 to buy a 20.5% stake in BeiGene to facilitate a partnership for the development and commercialization of multiple Amgen drugs in China, including therapies already on the market in the US and several preclinical candidates. The big biopharma invested $421m in BeiGene’s RDO to maintain a 20.3% pro rata share of the Chinese firm.

BeiGene went public in the US in at $24 per ADS in 2016 and grossed $158.4m. (Also see "Can Editas, BeiGene Offerings Redeem US IPO Class Of 2015?" - Scrip, 4 Feb, 2016.) The company launched an IPO on the HKEX in August 2018, raising $903m. (Also see "Finance Watch: Ascletis First Biotech To List Under New Hong Kong Rules, BeiGene Joins In" - Scrip, 3 Aug, 2018.)

Cytokinetics Raises Cash From Deal, Investor And Offering

South San Francisco-based Cytokinetics, Inc. priced an offering of 7.3 million shares at $24 each to gross $175m on 16 July. The offering came just two days after the company revealed a series of transactions on 14 July with RTW Investments LP and Ji Xing Pharmaceuticals worth up to $450m plus royalties, including an undisclosed upfront fee in a deal for rights in certain Asian countries to CK-3773274 (CK-274), a next-generation cardiac myosin inhibitor for hypertrophic cardiomyopathies (HCMs) and other cardiac indications.

The RTW-backed biopharma company Ji Xing received an exclusive license to develop and commercialize CK-274 in China and Taiwan. In exchange, Cytokinetics received an undisclosed upfront payment and is eligible to receive up to $200m in development and commercial milestone fees plus royalties from sales of CK-274 in Ji Xing’s territories.

Cytokinetics also has options for up to $90m in additional funding from RTW for the development of CK-274. The company may elect to receive $45m upon initiation of a global registration program for CK-274 in obstructive HCM and non-obstructive HCM in exchange for a 2% royalty payable to RTW on sales of CK-274 in the US and certain European countries. RTW will receive a 4% royalty if Cytokinetics accesses the entire $90m in potential funding from RTW.

The investment firm also agreed to pay $85m to purchase Cytokinetics’ royalty rights on future sales of MyoKardia, Inc.’s HCM drug mavacamten. (Also see "MyoKardia Readies First-Ever Hypertrophic Cardiomyopathy Drug For US Filing" - Scrip, 11 May, 2020.) In addition, RTW bought $50m worth of Cytokinetics’ common stock at $25 per share.

The company is developing muscle activators and muscle inhibitors for the treatment of a variety of diseases. The transactions with RTW will fund global development of CK-274, which is in Phase II, but Cytokinetics has preclinical through Phase III programs for both cardiac muscle and skeletal muscle diseases. Its next big clinical milestone will be Phase III results expected at the end of 2020 for the Amgen-led heart failure drug development program omecamtiv mecarbil. (Also see "Heart Failure Pipeline Review: Amgen's Omecamtiv And Merck's Vericiguat Step Up To Plate" - Scrip, 16 Feb, 2018.)

In other recent public company financings:

• Amicus Therapeutics, Inc. revealed an agreement with Hayfin Capital Management for a $400m credit facility on 17 July, which the Cranbury, NJ-based company said will put it on the path to profitability. The terms include an interest rate of LIBOR plus 6.5%, interest-only payments through mid-2024 and maturity in 2026. Amicus said the proceeds will be used to refinance existing debt and for other expenses, including research and development. The rare disease specialist noted that its Fabry disease drug Galafold (migalastat), which was approved in August 2018, is on track to generate $250m to $260m in revenue during 2020. (Also see "Amicus' Oral Fabry Drug Priced To Compete Against Traditional ERT" - Scrip, 13 Aug, 2018.)

• Seattle-based Adaptive Biotechnologies Corporation grossed $240m on 15 July from the sale of 6 million shares at $40 each. The offering totaled 8 million shares, including 2 million sold by one of the company’s shareholders. Adaptive will use the proceeds to advance development of its T-cell receptor (TCR) platform and commercialize its diagnostic products and services. (Also see "The Future Of Medicine: Cell And Gene Therapies Take The Lead" - Scrip, 11 Jun, 2020.) The company went public at $20 per share a year ago. (Also see "Finance Watch: Gene Therapy, Targeted Oncology Driving IPOs Despite Biopharma Stock Shakiness" - Scrip, 2 Jul, 2019.) It signed an agreement with Amgen in April for the development of antibodies that may be able to neutralize COVID-19. (Also see "Amgen, Adaptive Partner In COVID-19 Neutralizing Antibody R&D Effort" - Scrip, 2 Apr, 2020.) 

• Verona Pharma plc, headquartered in London with US operations in Raleigh, NC, said on 17 July that it completed a private placement totaling $200m with new and existing institutional and accredited investors. The private stock sale involved 39 million ADSs, each of which represented eight ordinary shares, at a price of $4.50 per ADS, which was equivalent to 43.1 million ordinary shares at $0.5625 each. The $183m in net proceeds will primarily fund the Phase III ENHANCE clinical trial program for ensifentrine (RPL554), a dual inhibitor of PDE3 and PDE4) in the treatment of chronic obstructive pulmonary disorder (COPD); the studies are expected to begin later in 2020. The funding is expected to extend Verona’s cash runway into 2023. ( (Also see "Verona Details COPD Opportunity For Ensifentrine" - Scrip, 2 Jun, 2020.)) 

• Sosei Group Corp. revealed on 16 July that it completed an international offering of shares and a sale of convertible bonds to raise $200m, which it will use to pursue acquisitions. The company will consider the purchase of both late-stage drug candidates and companies in its quest to add $50m to $100m in new revenue.  (Also see "Sosei Heptares Seeks Acquisitions After $200m Boost" - Scrip, 16 Jul, 2020.)

• Altimmune Inc. in Gaithersburg, MD closed an offering on 16 July of 4.1m shares at $23 each, including an offering of warrants to purchase 1.6 million shares in lieu of stock, which grossed $132.2m. The proceeds will fund general corporate purposes, including manufacturing and clinical trial activities for AdCOVID, a single-dose intranasal COVID-19 vaccine candidate, and ALT-801, a dual GLP-1/glucagon receptor agonist for the treatment of non-alcoholic steatohepatitis (NASH). Altimmune entered the NASH field a year ago with the purchase of Spitfire Pharma Inc. (Also see "Deal Watch: Altimmune Moves Into NASH With Purchase Of Spitfire" - Scrip, 9 Jul, 2019.)

• South San Francisco-based Atreca, Inc., which is developing immunotherapies for the treatment of solid tumors, sold 7 million shares of Class A common stock and 781,250 shares of Class B stock at $16 per share to gross $125m on 16 July. The company went public at $17 per share in June 2019. (Also see "Finance Watch: Investors Bet On Hope As Four Early-Stage Companies Launch US IPOs" - Scrip, 21 Jun, 2019.) It disclosed an antibody discovery deal with Merck & Co., Inc. in February. (Also see "Deal Watch: Bayer Teams With Nuvisan On Berlin-Based Small Molecule Research Group" - Scrip, 13 Feb, 2020.) Atreca said this month it will partner with Xencor, Inc. on the development of T-cell-engaging bispecific antibodies. (Also see "Deal Watch: Merck's Busy Stretch Includes Collaborations With Dewpoint, Zymeworks" - Scrip, 13 Jul, 2020.)

VC Deals: Imvax Raises $111m For Glioblastoma Therapy

In what may be a record-breaking year for venture capital financings, Philadelphia-based Imvax Inc. is the latest company to raise a VC mega-round of more than $100m. 

Existing investor HP Wild Holdings led the company’s $111m series C financing announced on 16 July, with participation from other major Imvax shareholders, including Ziff Capital Partners, Magnetar Capital and Sunshine Capital plus new investor Invus.

Imvax completed a Phase Ib clinical trial in May for its personalized neoantigen immunotherapy IGV-001 in the treatment of newly diagnosed glioblastoma multiforme (GBM), showing improvements over the standard of care in progression-free survival and overall survival.

The company will use its series C financing to initiate a Phase II trial of IGV-001 in newly diagnosed GBM in early 2021. It will also complete preclinical work and begin Phase I development with IGV-001 in additional solid tumors in 2021.

In other recent VC deals:

• Adimab, LLC has spun out a new company called Adagio Therapeutics, Inc., which launched on 16 July with $50m in series A financing to develop a portfolio of antibodies as therapeutics and prophylaxis against SARS-CoV-2, SARS-CoV-1 and other emerging bat coronaviruses. (Also see "Coronavirus Update: 'We Are Racing Against The Virus, Not America,' Says China’s Vaccine Frontrunner" - Scrip, 17 Jul, 2020.) Polaris Partners and Mithril Capital led the round with participation from Fidelity Management & Research Co. LLC, OrbiMed, M28 Capital, GV and others. The funding is expected to fund Waltham, MA-based Adagio’s programs through investigational new drug (IND)-enabling studies and into early clinical development. Tillman Gerngross, CEO of the antibody-generating firm and frequent pharma partner Adimab, is the co-founder and CEO of Adagio.  (Also see "Private Adimab Breaks $1 Billion Valuation, Offers VCs Liquidity Through $100 Million Secondary" - Scrip, 6 Feb, 2015.) Adimab has been able to turn a profit without going public and without developing any products for its own portfolio. (Also see "Adimab turns profit on deals with GSK, Biogen" - Scrip, 27 Jul, 2013.)

• San Diego-based Exalys Therapeutics Inc. launched on 16 July with $15m in series A financing from Domain Associates and Catalys Pacific and with a portfolio of next-generation EP4 receptor antagonists licensed from Eisai Co., Ltd. The drugs will be developed for inflammatory disorders with an initial focus on reducing neuroinflammation that causes postoperative delirium, a profound challenge especially for patients who are more than 65 years old and for those who already have Parkinson’s or Alzheimer’s disease, representing an annual cost of $150m for the US health care system. The company, which intends to rapidly pursue proof-of-concept data in patients, is led by CEO Rick Orr with Eckard Weber and Dennis Podlesak, a group of repeat entrepreneurs involved in building several companies, including Peninsula Pharmaceuticals Inc., acquired by Johnson & Johnson; Cerexa, acquired by Forest Laboratories, Inc.; Calixa Inc., acquired by Cubist Pharmaceuticals, Inc.; and Corthera, acquired by Novartis AG. (Also see "Cubist buys private antibiotic firm for up to $403 million" - Scrip, 15 Dec, 2009.) (Also see "Novartis to pay up to $620 million for Corthera" - Scrip, 23 Dec, 2009.)