After JPM, biotechs still scrambling for IPOs as Kaleido, Cirius file amid government shutdown

Nasdaq
The biotechs are all planning to list on the Nasdaq, but their filings come as the SEC is struggling with staffing during the government shutdown. (NasdaqStockExchange)

We saw a flurry of initial public offering activity in the lead-up to the J.P. Morgan Healthcare Conference, but it seems as the dust settles on another chaotic week, biotechs are not standing still.

At the start of this year’s meeting in San Francisco, three early-through-late-stage biotechs wanted nearly $300 million between them. At the end of the week, two more have joined them: Kaleido Biosciences and Cirius Therapeutics.

But there may be a wait on these biotechs' hands, given the ongoing partial U.S. government shutdown, which has cut the number of staffers at the SEC (PDF). But all five have at least got their paperwork in.

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First up, Massachusetts-based Kaleido, which wants a beefy $100 million IPO for its midstage work on microbiome therapies to treat rare genetic disorders. Just six months ago, the biotech got off a $101 million series C.

The Flagship Pioneering-founded company only came out of stealth in September 2017, with $65 million and the goal of developing new chemistries that direct the human microbiome and its various bacteria.

Whereas previous gut-bacteria-targeting strategies have focused on adding or subtracting certain microbes from the mix, Kaleido is looking to treat and shape the microbiome as a single human organ, which metabolizes nutrients and interacts with other parts of the body through biochemical signals.

The company hopes to manage the microbiome’s total metabolic output to treat diseases across multiple areas, including rare genetic disorders.

Kaleido’s discovery platform performs automated, high-throughput screening of the company’s libraries of novel molecules against human ex vivo microbiomes, allowing early testing of both healthy and patient volunteers.

In October 2017, the biotech penned an agreement with the genomics platform company CoreBiome to provide high-scale microbiome sequencing on tens of thousands of microbiome samples, combining physiological data, metabolomics and screening assays.

Since its founding in 2015, the quiet biotech has conducted at least 10 pre-IND studies including safety and tolerability studies in human subjects.

The most advanced products in Kaleido’s pipeline include treatments for high levels of ammonia in the blood linked to urea cycle disorders or hepatic encephalopathy. Other disease targets include drug-resistant bacterial infections, renal disease, diarrhea, cardiovascular disease, immuno-oncology and diabetes.

It plans to list on the Nasdaq under the symbol "KLDO."

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And then there’s Cirius, which wants $86 million toward its work on liver and metabolic diseases.

The San Diego-based company, founded back in 2015, plans to list on the Nasdaq under the symbol "CSTX."

One known as Octeta Therapeutics, the company has undergone a transformation in recent years with new leadership, location and a new name coming in April 2017. The NASH biotech is hoping to cash in on the potentially large fatty liver market, although it has some tough competition from across nearly every biopharma company.

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But Cirius’ metabolism-modifying approach differs from—and is potentially complementary to—the mechanisms of action of NASH assets in the clinic at other companies, opening the door to combination therapies that could help it in market terms in the future.

The IPO cash will go toward its lead product candidate, MSDC-0602K, a once-daily, oral small molecule for NASH with liver scarring. It’s currently in a phase 2b test in just over 400 patients.

Back in October, the company reported positive interim results from the first 328 subjects reaching their six-month follow-up visit, which “demonstrated improvements in liver enzymes and glycemic control,” the biotech notes in its SEC-1 filing.

“The overall rate of treatment emergent adverse events was similar across placebo and all dose cohorts, and we saw no signal for peripheral edema, a safety concern associated with first generation thiazolidinediones, or TZDs. We expect to report final data from this clinical trial in the second half of 2019.”