Regulus Therapeutics capped a busy week of deal-making with a proposed initial public offering of $57.5 million, which the biotech would use in part to fund work on its pipeline of microRNA drugs now in pre-clinical development for cancer, hepatitis C, cardiovascular and fibrotic diseases.
San Diego-based Regulus, formed in 2007 with assets from gene-silencing specialists Alnylam Pharmaceuticals ($ALNY) and Isis Pharmaceuticals ($ISIS), hits the IPO trail with major drug-research alliances with GlaxoSmithKline ($GSK), Sanofi ($SNY) and AstraZeneca ($AZN). (Biogen Idec ($BIIB) tapped Regulus in a deal revealed this week to find markers for multiple sclerosis, not new drugs.) Those founding drug developers and pharma partners helped Regulus raise a total of $106.6 million in upfront deal fees and other funding rounds, according to the biotech's S-1 filed with the SEC on Friday. It has applied to list its shares on the Nasdaq Global Market under the symbol "RGLS."
Biotechs have had mixed results in completing IPOs this year; many companies have had to dramatically reduce their offering amounts to get their deals done. Others have had to wait until they had late-stage programs in their pipelines to attract public investor interest. Regulus is likely years away from testing one of its microRNA-targeting drugs on humans, yet the developer already has non-binding commitments from Sanofi to buy up to $10 million of its common stock at the offering price and both GSK and Isis have shown similar interest in each grabbing up to $2 million at the public offering price. Those players could buy nearly a quarter of the shares in the IPO.
Plus, AstraZeneca has agreed to purchase $25 million in Regulus' common stock at the public offering price in a separate private placement, concurrent with Regulus wrapping up the IPO, according to the regulatory filing. This week Regulus announced that AstraZeneca would collaborate with the biotech on microRNA-targeting drugs for cardiovascular disease with a lead program focused on atherosclerosis.
Regulus is researching nucleic acid-based therapies, called anti-miRs that target microRNAs, in hopes of returning diseased cells to a healthy state, and the company believes that its platform could be applied to many different diseases. In 2014, the company aims to file its first investigational new drug (IND) applications with the FDA.
Regulus' pharma alliances involve a total of $1.7 billion in potential milestone payments, but half of that money would depend on the commercialization of drugs involved in the deals. So most of those biobucks are years away from reach, and, as with most biotechs, the company is very much a bet on the future. And RNA drug development has been a roller coaster ride for investors over the past decade, with some setbacks in recent years, such as Roche's ($RHHBY) exit from RNAi drug research in 2010 and rounds of layoffs at Alnylam.
- here's the S-1 filing