LONDON – Circassia Ltd. is ending the long UK initial public offering (IPO) drought in spectacular fashion, with plans to raise £175 million (US$285 million) in a listing on the main market in London, providing funds to take four allergy treatments through phase III and to commercialize the lead cat allergy product.

While a handful of companies have succeeded in joining the junior Alternative Investment Market in London, the last biotech to complete an IPO on the main market of the London Stock Exchange was the now defunct antiscarring specialist Renovo plc, which raised £57.5 million in April 2006.

To find a UK biotech raising more than £100 million on a public market it’s necessary to delve into the ancient history of the genomics boom in 2000, when Oxford Glycosciences plc took £137.5 million in a follow-on offering, on adding a listing on Nasdaq to its London listing.

Despite the long gap, it has not been difficult to get investor support for the flotation, said Steve Harris, Circassia CEO. “Over the summer, three phase IIb trials reported out positively, confirming we have a platform technology to address the underlying cause of allergy. We went to see potential investors in the U.S. and Europe and got good feedback,” he told BioWorld Today.

If Harris can deliver, the Circassia IPO will surpass Ophthotech Corp.’s $192.28 million listing in 2013 and tools firm Pacific Biosciences Inc.’s $200 million IPO in 2010. However the $950 million raised by blood products company Talecris Biotherapeutics in 2009 will leave Circassia in the shade.

Although the current fashion for biotech might have made a Nasdaq listing easier, Harris said that alternative “didn’t feel right.” Circassia is built on science that originated at Imperial College London, is based in Oxford, UK, and London investors gave the company a good reception. “We have a unique technology; there’s a big market opportunity, and we are a long way ahead. Even compared to U.S. companies, investors don’t often see a profile like that,” Harris said.

Circassia stands out among private UK biotechs in the level of support it has received, with investors putting in a total of $178 million since the company spun out of Imperial College in 2006. Most recently, in April 2011, the company raised $98 million in Series D funding. Harris said the company has “used this money very wisely,” to reach the position where it has a cat allergy treatment halfway through a 1,200-subject phase III trial, and products against grass, ragweed and house dust mite allergies ready to enter phase III development.

In total, Circassia invested £50.8 million in R&D in the three years ending in December 2013 and at that point had cash of £30.6 million.

“We have had great support from the existing shareholders, and they will continue to support us,” Harris said. The institutional backers will add to their holdings in the IPO, he said. “We hope we can show that we can build value for shareholders. It’s always been the plan for us to build the next specialty biopharma in the UK, and we’re well on with that.”

The major investors include Invesco Perpetual, Lansdowne Partners and Imperial Innovations plc, the quoted technology transfer arm of Imperial College, which is the largest shareholder, with a 19.7 percent stake. That holding represents 25 percent of the total value of Imperial Innovation’s whole portfolio.

J.P. Morgan Securities plc is managing the IPO, with Peel Hunt LLP acting as a joint bookrunner and Canaccord Genuity Ltd. and Shore Capital Stockbrokers Ltd. as co-managers.

Circassia’s Toleromune technology, initially developed by Mark Larché and Barry Kay at Imperial College, uses synthetic versions of epitopes identified from allergens to generate helper T cells that subdue allergic reactions and induce immune tolerance. In trials to date, short courses of treatment, involving four doses over 12 weeks, have relieved allergic symptoms for up to a year.

According to Circassia, more than 400 million people worldwide suffer from allergic rhinoconjunctivitis brought on by allergens. The current treatment market is valued at $12 billion per annum. While the market for allergy treatments is substantial, many sufferers complain that antihistamines and steroids are ineffective, or only partially effective.

Meanwhile, traditional immune tolerization treatment, in which the immune response is subdued by exposure to escalating doses of the allergen in question, requires repeated dosing under supervision, and there is a risk of an extreme immune reaction. In comparison, Circassia has shown four doses of its products to be effective. Indeed, a two-year follow-up of 50 of the 202 subjects in the phase II study of the cat allergy treatment, published in February 2013, reported that the improvement in symptoms was maintained at two years.

Circassia expects effective allergy vaccines would take market share from existing treatments and also enable the market to grow. The proceeds of the IPO will provide the means to develop a marketing infrastructure and commercialize its own products in North America and the major European markets. Harris said a sales force of 100 would be sufficient to address the 2,500 allergy specialists in the U.S.

In other markets, including Japan, the company intends to license commercialization rights or to find marketing partners.

Full-scale outsourced manufacturing is in place for the two lead programs and is close to completion for the other two products. The IPO also will enable Circassia to advance earlier-stage programs for treating birch and Japanese cedar allergies and also to protect against the common ascomycete fungi Alternaria, which is a major cause of allergy.

Steve Bates, chief executive of the UK Bioindustry Association, said he hopes Circassia’s IPO will provide a boost for the whole sector. “It is great to see public market investors showing an interest,” he said.

Harris too, said he hoped investors would be more open-minded about the sector. However, he said, “the market will continue to be very discerning; it won’t be a free-for-all.”