BioXcel takes surprising path with IPO of oncology spinout OnkosXcel

In a move that analysts called surprising, BioXcel Therapeutics is moving immuno-oncology subsidiary OnkosXcel towards an IPO. 

BioXcel announced the SEC submission yesterday after market close and one week after revealing that it was still reviewing strategic options for OnkosXcel, including potential partnering or third-party investments.

The number of shares and potential price for the public listing was not revealed in the Tuesday press release, but the proposed IPO is expected to occur after an SEC review process.

According to a Mizuho analysis of early 2022 biotech IPOs, the time from initially submitting IPO paperwork with the SEC to actual IPO pricing took an average of five to six months, potentially placing OnkosXcel’s IPO in August or September.

Last year, after BioXcel zoomed in on its neuroscience portfolio and received FDA approval for Igalmi to treat agitation tied to schizophrenia or bipolar I or II disorder, the company spun off its immuno-oncology assets into OnkosXcel. Now, less than a year after its formation, the subsidiary has submitted a confidential draft registration statement with the SEC to list on the public markets.

OnkosXcel has a midstage DPP8/9 inhibitor called BXCL701 for advanced prostate cancer and solid tumors.

The IPO decision comes as “a surprise” to Mizuho analysts because the firm thought partnering with a pharma to continue development of BXCL701 was “perhaps the more straightforward path.”

OnkosXcel’s most advanced asset, BXCL701, is an oral innate immune activator being assessed for aggressive forms of prostate cancer and other solid and liquid tumors. Last month, the company shared data from a phase 2 trial evaluating BXCL701 in combination with Merck & Co.’s blockbuster checkpoint inhibitor Keytruda in people with small cell neuroendocrine metastatic castration-resistant prostate cancer (SCNC). The full phase 2a data showed a composite response rate (CRR) of 25% and an overall favorable safety profile, with no immune-related adverse events reported.

Mizuho analysts dubbed the data “impressive” overall, given that the CRR compares to a rough 2-5% response rate seen with Keytruda alone in the specific patient population. There also aren’t any FDA-approved treatments for this specific subset of advanced prostate cancer patients, with a survival rate after unsuccessful first-line treatment measured in just weeks or months, according to Mizuho. The analysts also noted that there doesn’t appear to be any immediate competitors in the SCNC space.

OnkosXcel plans to advance BXCL701 into a phase 2b registrational trial in the second half of this year, pending further discussion with the FDA. The company also has plans to launch a midstage trial in small cell lung cancer this year.  

Many in the biotech industry have hoped biotech IPOs would pick up steam this year. While some signs of life have broken through the frozen-over market waters so far (re: Mineralys and Structure), the landscape remains fairly bleak.