BioWorld International Correspondent
LONDON - Renovo Group plc completed an oversubscribed initial public offering, raising £50 million (US$87 million) just 10 months after being forced to pull out of a previous attempt to list.
Not only did the scarring and wound-healing specialist raise £10 million more than it was looking for initially, the shares made a compelling debut, rising from a listing price of 87 pence to £1.06 when trading began Friday.
Relieved to have succeeded this time, the CEO and founder Mark Ferguson said, "The upsizing of the anticipated base deal to £50 million in response to strong investor demand demonstrates the high level of support from institutional investors in Renovo's commercial strategy and first-in-class pipeline of drugs."
On top of the IPO, existing investors subscribed for additional new shares worth approximately £10 million.
The market capitalization of the Manchester-based company on listing was £154 million.
Current shareholders and management did not sell any shares in the IPO, and are subject to lock-up arrangements of six months and 12 months, respectively. Renovo said the money raised will enable it to take four products that are in clinical development through to commercialization.
All Renovo's products arise from basic research carried out by Ferguson at Manchester University, where he noted that if embryos are operated on in utero, the wounds heal without scarring. From that he discovered compounds - both small molecules and proteins - that target the underlying molecular mechanism involved in healing.
The lead product, Juvista, administered by intradermal injection into wound margins, has completed two Phase II efficacy trials in the UK.
The product was safe and well tolerated and showed clinically and statistically significant prevention or reduction of scarring. The interim analysis of a third Phase II study also showed proof of efficacy.
Acute dosing with Juvista around the time of surgery prevents or reduces scarring from plastic surgery or dermatology procedures, and improves more severe scars that result from trauma or major excisions.
There also was evidence that Juvista accelerated healing, and Renovo has generated preclinical data showing the product is effective in treating restenosis as well. Juvista is a human recombinant protein, TGF beta 3, that is known to play a role in the formation of embryonic skin. It is present at high levels in developing embryonic skin and in embryonic wounds that heal without scarring, but by contrast, occurs at low levels in adult wounds that scar.
TGF beta 3 animal knockouts show scarring following embryonic wounding and exhibit a defect in cell migration that is rectified by addition of exogenous TGF beta 3. Renovo's second product, Juvidex, is designed to improve the appearance of existing scars.
The company submitted a pre-IND package to the FDA in 2005 to do a trial in the surgical revision of disfiguring scarring, and has since had a formal pre-IND meeting in which it discussed the potential for fast-track status of the product. Juvidex may be useful in treating corneal scarring and abdominal adhesions also.
The third product, Zesteem, has reached Phase II in the acceleration of healing, while the fourth, Prevascar, is another anti-scarring product.
Prevascar is based on human recombinant IL-10, and Renovo has in-licensed intellectual property from Schering-Plough Corp., of Kenilworth, N.J., enabling it to proceed straight to Phase II. The trial has fully recruited 175 patients, ages 18 to 85, and is now in follow-up.