Flex Pharma pulls off an $86M IPO for its cramp-treating spice cocktail

Christoph Westphal

In another sign last year's bull market for biopharma has survived into 2015, Flex Pharma ($FLKS), at work on a biotech dietary supplement, priced an $86.4 million IPO above its expected range.

The company, founded by serial biotech entrepreneur Christoph Westphal, moved 5.4 million shares at $16 each, exceeding the $12 to $14 range it previously planned. The biotech set aside another 810,000 for its underwriters to cover overallotments, setting its maximum deal value at about $99 million if everything goes as well as possible.

With the proceeds, the Boston-headquartered Flex will bankroll the development of a preclinical compound to treat nocturnal leg cramps and spasms associated with severe neuromuscular conditions, including multiple sclerosis. The company's treatment is a combination of ginger extract, cinnamon extract and capsicum--and, because it qualifies as a dietary supplement, Flex believes it can get into pivotal trials without going through the FDA's more stringent IND process.

The next step for Flex is a placebo-controlled proof-of-concept study on nocturnal leg cramps, which the company plans to kick off next quarter, all the while plotting further development in MS spasticity, cervical dystonia and spinal cord injury. In tandem, the company is developing a consumer formulation of its top prospect, hoping to launch it over the counter as a remedy for exercise-associated muscle cramps in 2016.

Westphal, who made his name with Verastem ($VSTM) and the ​GlaxoSmithKline ($GSK)-acquired Sirtris Pharmaceuticals, founded Flex last year alongside Harvard Medical School's Bruce Bean and Nobel Laureate Rod MacKinnon. The company raised a $40 million A round in September, recruiting a wide cast of investors including former Apple ($AAPL) CEO John Sculley, Alnylam ($ALNY) CEO John Maraganore and Westphal's own Longwood Fund.

Flex's model--selling a supplement with pharma-like implications--may conjure unpleasant memories among investors who recall a 2010 spat in which GSK took Westphal and fellow Sirtris executive Michelle Dipp to task. Through a nonprofit, the pair were selling a dietary supplement based on resveratrol, a red wine-derived compound that happened to be the active ingredient in Sirtris' pipeline therapies. GSK summarily demanded the two sever all ties with the organization. And, three years later, after running into clinical setbacks with resveratrol therapies, the U.K. drugmaker shuttered Sirtris' Cambridge, MA, offices.

Meanwhile, 2014's record-setting pace of biotech IPOs has hardly slowed in the new year, as this week alone has seen Ascendis Pharma ($ASND) raise $108 million and Zosano Pharma ($ZSAN) pull in $50 million. Gene therapy outfit Spark Therapeutics has boosted the size of its planned public debut, increasing its expected price range by about 25% with hopes of raising $130 million or more in the coming weeks.

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