Destiny pulls off IPO to fund infection-prevention trial

London Stock Exchange sign
The London Stock Exchange (Image: jam_90s - CC BY 2.0)

Destiny Pharma has listed on London’s AIM exchange. The IPO gives Destiny £15.3 million ($19.8 million) to assess lead candidate XF-73 in the prevention of postsurgical staphylococcal infections in a phase 2b trial.

Brighton, U.K.-based Destiny’s pitch to investors is based on evidence XF-73 can kill drug-resistant bacteria. As importantly, the results of a 55-passage resistance study suggest bacteria struggle to develop tolerance to XF-73. The study underpins Destiny’s plans to position XF-73 as preventative product capable of cutting the risk of postsurgical staphylococcal infection.

Buoyed by an IPO haul that rose more than 10% in the days before the listing, Destiny now plans to test XF-73 in a 200-patient phase 2b trial. The study will randomize presurgical patients to receive a gel formation of synthetic dicationic porphyrin derivative XF-73 or a placebo. Destiny is looking to the trial to show XF-73 outperforms placebo against microbiological endpoints.

Success in that trial will tee Destiny up to enter into partnership talks ahead of phase 3 or raise more money and take the drug to the next stage of development itself. Destiny’s openness to going solo is underpinned by a belief the cost of the phase 3 program and sales force needed to win approval for and market the hospital-based product would be within its reach.   

Going solo would require Destiny to squeeze more money out of a stock exchange that has seen a dip in biotech activity in recent years. Destiny’s £15.3 million haul makes it the largest biotech IPO in London since U.S. company Verseon made the unusual move of listing on AIM. Verseon raised £65.8 million but its stock has fallen 36% since then. That period also covers the fall of Circassia, which has slipped 73% since its massive IPO made it the posterchild for a potential resurgence of public biotech activity in London.

That resurgence petered out quickly. But Destiny has shown small listings are possible. The biotech hinted it was preparing for life on public markets when it hired Neil Clark to serve as CEO five months ago. The biotech veteran was CFO of CeNeS Pharmaceuticals when it went public in 1999 and held the same role at Ergomed as it prepared for and executed its IPO.  

Destiny was rewarded for its strategy with an upsized IPO. Shares in the biotech rose up to 44% on its first day of trading.