Merus is edging toward its long-gestating $65 million (€57 million) Nasdaq IPO. The cancer specialist, which lists Novartis ($NVS), Johnson & Johnson ($JNJ) and Pfizer ($PFE) among its largest investors, plans to build the IPO on the support of its existing backers, which are expected to buy half of the offered shares.
Utrecht, the Netherlands-based Merus first talked up the prospect of a Nasdaq IPO during the go-go month of April 2015. At that time, the $100 million it was aiming for was on the low side of the sums being proposed and raised by fellow oncology biotechs such as Adaptimmune Therapeutics ($ADAP), Aduro Biotech ($ADRO) and Blueprint Medicines ($BPMC). Yet by the time Merus formalized its plan to go public in October, the tide had turned, leaving a clutch of biotechs on the outside looking in through the then-closed IPO window.
Having raised €72.8 million in a private round in August, Merus was better equipped than some to ride out the downturn in sentiment toward biotech IPOs. And the immuno-oncology player has gone back to its current investors to get its IPO out the door. Merus has commitments from as-yet-unnamed existing institutional investors to buy $32.5 million of the IPO shares. Bay City Capital, Aglaia Oncology Fund, Sofinnova Venture Partners, Novo A/S and LSP sit alongside the aforementioned Big Pharma trio on the list of Merus’ main investors. Each organization owns more than 5% of the company.
If Merus can find buyers for the remaining 2.2 million shares at the $15-a-pop midpoint of its target range, it will exit the offering with net proceeds of $56.7 million, a sum it plans to split fairly evenly between three of its pipeline prospects. Lead candidate MCLA-128 will swallow up $17 million of the IPO haul. Merus anticipates this funding will take it through to the end of a Phase I/II clinical trial in patients with HER2-expressing solid tumors. Merus expects top-line data in the second half of 2017, but that target that has yo-yoed over the past 6 months.
As recently as January, Merus told investors to expect data by the end of the year. While the public is now set to have to wait longer to get a full look at the data, Merus is continuing to release snapshots of the progress of the study. In the dose-escalation stage, 12 of the 27 patients who took MCLA-128 experienced “an objective positive response.” Of those 12, 11 had stable disease after two cycles of treatment. Three people were stable after four rounds of therapy. Merus thinks MCLA-128 kills cancer cells by blocking growth pathways and eliciting the support of immune effector cells.
Merus is moving another two candidates down the pipeline closely behind MCLA-128. The more advanced of the pair, MCLA-117, began a Phase I/II study in patients with acute myeloid leukemia this month. If Merus hits its IPO fundraising target, it will commit $14 million to the study, a sum it thinks will see it through to the delivery of top-line data in the first half of 2018. A further $10 million is earmarked for MCLA-158, which is expected to enter the clinic as a treatment for colorectal cancer before the end of 2017. Each of the candidates is a bispecific antibody.
The willingness--or not--of Nasdaq investors to bankroll the advance of the programs could go some way to indicating whether the freeze on listings by European biotechs is coming to an end. Over the past 6 months, Basilea Pharmaceutica (SWX:BSLN) and Bavarian Nordic (CPH:BAVA) have both canned planned listings, while perennial IPO bridesmaid Mapi Pharma has continued to try unsuccessfully to go public.
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