Acelyrin, with 3 late-phase trials underway, seeks IPO boost to $400M VC haul to take on Lilly, Novartis

Acelyrin is about to find out whether a once well-trodden path is still open to biotechs that need big bucks to bankroll their plans. Having raised $408 million from private investors in recent years, the immune drug developer now wants public financiers to step up and help it deliver phase 2b/3 data in three indications.

Los Angeles-based Acelyrin has filed its IPO paperwork at a later point in development than many of the early-stage biotechs that went public during the go-go years and are now scrabbling for cash. The company's top priority is izokibep, a small therapeutic protein inhibitor of IL-17A that Acelyrin licensed from Affibody and is in late-phase development in three immunological diseases.

Top-line data from a phase 2b/3 trial in the skin condition hidradenitis suppurativa are due in the second half of 2023, with results from studies in psoriatic arthritis and uveitis set to follow around the middle of next year. If all goes to plan, Acelyrin will have part of the data package for approval in three indications in a little over 12 months. Some biotechs that went public when the IPO window was wide open were 12 months from having any clinical data.

Whether Acelyrin represents an attractive investment to financiers will depend on how they view the data on izokibep. Acelyrin acquired the candidate on the strength of evidence that it is more potent than the existing anti-IL-17A agents Eli Lilly’s Taltz and Novartis’ Cosentyx and, because it is much smaller than those approved antibodies, can better penetrate dense, poorly vascular tissues. 

In the first part of the phase 2b/3 hidradenitis suppurativa trial, one-third of people who received 160 mg of izokibep subcutaneously once a week had a 100% reduction in their abscess and inflammatory nodule count. The small size of the cohort, which enrolled 30 people, and open-label design of the first part of the trial make it hard to draw firm conclusions, but the data to date look very competitive. Most data sets focus on lower rates of clearance, such as 50% or 75%, although Incyte is seeing complete clearances.

With a midphase trial linking izokibep to complete clearance of psoriasis skin lesions in 67% of patients, and Acelyrin working on uveitis and axial spondyloarthritis, too, the drug candidate has a shot at making a mark on multiple major markets. A who’s who of leading drugmakers are targeting the same markets, though. 

Acelyrin will need deep pockets to establish izokibep as the heir apparent in the blockbuster indications. The biotech ended March with approximately $289.2 million but needs more money to fund the phase 2b/3 trials while also advancing its IGF-1R candidate lonigutamab and c-KIT prospect SLRN-517 to earlier clinical readouts. 

If the IPO plan fails, Acelyrin could fall back on private investors, who committed $150 million as part of the series C that the biotech is yet to receive. Subject to certain conditions, Acelyrin will add the cash to its coffers if it is unable to complete the IPO before June 30. 

Such sums are currently well beyond the reach of CytoMed Therapeutics, another member of the small band of biotechs to try to go public in 2023. CytoMed priced its offering on Thursday, revealing plans to raise just under $10 million by selling shares at $4 a pop, the bottom end of its target range. The biotech plans to use $2 million to take its NKG2DL-targeting CAR-gamma delta T cell therapy into the clinic and up to the start of phase 2.