AC Immune upsizes IPO, hits bottom of range, netting $58M for neurodegeneration R&D

AC Immune ($ACIU) has pulled off the potentially tricky task of persuading investors to back its IPO. The Genentech-partnered neurodegeneration specialist is offloading 6 million shares, 32% more than originally planned, at the bottom end of its targeted $11 to $13 price range.

Lausanne, Switzerland-based AC Immune is set to net $57.8 million through the IPO, almost $11 million more than it expected to raise based on the original share allotment and the midpoint of the price range. With AC Immune entering the IPO with a sizable cash pile generated in private rounds and through Big Biopharma pacts, it exits the listing process with the financial means to embark on a period of substantial investment in its pipeline.

ACI-24, a liposomal therapeutic vaccine, will swallow up $65 million, a sum AC Immune thinks will see it through to the end of a Phase IIb trial in Alzheimer’s, with enough left over to get into a Phase II trial in patients with Down syndrome. The hypothesis behind the Down-focused program relates to the extra copy of chromosome 21 people with the condition carry, which is thought to cause amyloid beta to accumulate, resulting in the early-onset of Alzheimer’s-like symptoms.

The next big item on AC Immune’s to-do list is a set of Parkinson's diagnostic and drug development programs, including its alpha-synuclein morphomer. AC Immune is allocating $25 million to the work, some of which will go toward advancing an alpha-synuclein morphomer through preclinical and into Phase I. The hope is that the small molecule acts on the misfolded and aggregated alpha-synuclein protein that characterizes Parkinson’s disease.

While these programs will attract the most investment and attention of AC Immune’s in-house R&D teams over the coming years, the investors who drove the company to its IPO will have at least one eye on the performance of its partnered programs. Most notably, Roche’s ($RHHBY) Genentech began a Phase III trial of crenezumab earlier this year. If the trial bucks the trend and delivers strong data, crenezumab could become the first piece of AC Immune’s multipronged attack on Alzheimer’s.

AC Immune's investors were given a reminder of the other, arguably more likely, outcome by Lundbeck, which posted negative Phase III data on 5-HT6 agonist idalopirdine within hours of the pricing of the IPO. The data wiped 15% off Lundbeck’s share price. With existing investors buying $30 million of AC Immune's IPO shares, many of the financiers have first-hand experience of the risks of Alzheimer's R&D, if not the consequences of missteps on stock prices.