Following a sluggish third quarter for biopharma IPOs, the sector isn't exactly starting the fourth quarter off with a bang, with Azurrx Biopharma Inc. lowering its already-low IPO sights to price a micro offering of 960,000 shares Wednesday at $5.50 apiece. Gross proceeds of about $5.3 million are earmarked for validation tests for phase IIa-ready lipase modulator MS1819, in development for exocrine pancreatic insufficiency.
Meanwhile, Accelerated Pharma Inc., of Westport, Conn., set the proposed range for its own modest offering to support work on a next-generation platinum-based chemotherapy.
Despite an uptick in the IPO market in general, biopharmas have not been finding encouraging reception of late. During the third quarter, only seven companies completed offerings in the U.S., raising $396 million, figures that were down by 42 percent from the same period a year ago and 36 percent off second-quarter 2016 numbers. (See BioWorld Today, Oct. 10, 2016.)
BioWorld data show a total of 10 additional firms currently in the queue for pricing on U.S. exchanges, with Swiss company Crispr Therapeutics AG potentially next in line, having recently set terms for offering 4.7 million shares at a price range of $15 to $17, which would raise $75.2 million at the midpoint. Crispr, which as its name suggests, is working in the hot gene-editing space, giving it a good shot at reaching that goal. Fellow gene-editing firms Editas Medicine Inc. and Intellia Therapeutics Inc. priced IPOs this year – gross proceeds totaled $94.4 million and $108 million, respectively – and both listings were warmly received on Wall Street. (See BioWorld Today, Feb. 4, 2016, and April 13, 2016.)
Azurrx, however, came to the table with considerably less fanfare. Quietly incorporated in early 2014, the company's work dates back to Protea Biosciences Inc.'s French subsidiary, Proteabio Europe SAS, which was acquired by Azurrx. The company, with headquarters in Brooklyn, N.Y., and scientific operations and nine of its 12 employees in France, focuses on developing nonsystemic biologics for treating gastrointestinal disorders. Its lead program, MS1819, is an autologous yeast recombinant lipase targeting exocrine pancreatic insufficiency (EPI), a condition in which patients are unable to properly digest food. It's often associated with chronic pancreatitis and cystic fibrosis.
Patients with EPI are treated with pancrelipase, a porcine-derived pancreatic enzyme; however, the animal origins are accompanied by potential adverse events, stability and formulation issues. MS1819 is designed to overcome those limitations and, if successful, could tap into a lucrative market. In its S-1 filing, Azurrx cites IMS Health data showing estimated sales of porcine-derived lipase products totaling about $880 million for 2015.
MS1819 completed phase I/IIa testing in 2011. Before moving into a phase IIa trial, expected to start near the end of this year, Azurrx will need to conduct formulation work and validation and stabilization testing for the MS1819 capsules.
The company allocated about $2.2 million to that program in IPO funds, according to the SEC filing.
Specific design details for the upcoming phase IIa are still in the works, but Azurrx said in its filing that it expects enrollment to take up to 18 months, with initial results available roughly six months following initiating of the study.
Earlier in the pipeline is AZX1101, a recombinant beta-lactamase combo of bacterial origin, aimed at preventing hospital-acquired infections by resistant bacterial strains induced by parenteral administration of beta-lactam antibiotics. That program is in preclinical development.
Azurrx, which had about $1.4 million in cash as of June 30, originally had hoped to raise $15 million in the IPO. It previously reduced the size of its offering from 2.14 million shares to 1.7 million shares at a range of $6 to $8 in September.
Wallachbeth Capital LLC and Network1 Financial Securities Inc. acted as co-book-running managers and Viewtrade Securities Inc. acted as a co-manager. Underwriters have a 45-day option to purchase up to 144,000 additional shares to cover overallotments, which could add up to $792,000 in IPO proceeds.
Shares of Azurrx (NASDAQ:AZRX) closed at $5.36 Wednesday.
ACCELERATED SETS RANGE
Seven months after filing a confidential S-1, Accelerated disclosed plans to sell 1.9 million shares priced between $8 and $10, which would bring in $17.1 million at the midpoint range and gain the company a Nasdaq listing under the ticker ACCP.
Underwriters Rodman & Renshaw and Maxim Group LLC would have a 45-day option to purchase up to an additional 283,334 shares, for up to an additional $2.55 million at the midpoint price.
Founded in 2014 with the aim of repositioning late-stage candidates using a genomic platform to identify patients most likely to respond to treatment, Accelerated's lead program is next-generation platinum-based chemotherapy picoplatin, a drug that looked to be dead in the water a few years ago.
Despite promising results in earlier studies, picoplatin fizzled in the phase III SPEAR study in small-cell lung cancer in 2009, costing shares of then-developer Poniard Pharmaceuticals Inc. nearly all their value. San Francisco-based Poniard later served as a public shell for a reverse merger with Allozyne Inc., with picoplatin put on the partnering block. (See BioWorld Today, Nov. 17, 2009, and June 24, 2011.)
Encarta Inc., acquired in the asset in 2013, and Accelerated licensed rights to it earlier this year following extensive analysis of the SPEAR study. Accelerated management determined the trial miss was due to design and elements of its execution rather than failure of the drug itself, and indicated that certain subgroups of patients should have been excluded.
Funding from the proposed IPO will support Accelerated's application of its genomic tools and predictive models to select patients to best respond to picoplatin. It plans to begin a phase II trial in both colorectal cancer and squamous cell cancer of the head and neck starting in November, with the aim of determining the genomic signatures of the drug in those patients. Upon completion of those studies, phase III studies could follow in one or both indications.
Remaining proceeds from the offering will be used for producing drug product for trials and for working capital and general corporate purposes.