Bucking a negative trend, Servier-backed GeNeuro gets off its IPO

Geneva, Switzerland

We have reported on a string of biotechs trying and failing to go public this quarter--but today the Genevan biotech GeNeuro has managed to pull off a €33 million IPO in Europe.

The Swiss multiple sclerosis specialist has listed on the Paris Euronext--the European exchanges operator--through its 14.4 million shares (including 2.5 million new shares issued under a global offering) raising a total of €33 million ($37.2 million). The shares range was, however, fairly low at €12.65 to €15.95.

The company, which has been around for a decade now, will run its ticker as "$GNRO"; its market cap at the day of listing was €190 million ($215 million).

GeNeuro described its research as seeking a “new approach” for treating autoimmune diseases, and is currently developing a treatment that directly targets a potential cause of multiple sclerosis (MS).  

Its lead drug is an antibody designed to shut down MSRV-Env, the envelope protein of MS-associated retrovirus. By blocking a protein that is reactivated in MS brain lesions--which the biotech's investigators say is both pro-inflammatory and an inhibitor of remyelination--the company says it has a new pathway to pursue that has the potential to address both relapsing and remitting MS as well as the progressive form of the disease, something that has never been accomplished before.

The drug is currently in mid-stage testing, but will be racing to market with another French native biotech, MedDay, which is also seeking to create the first drug for progressive forms of MS. There are already a number of new meds on the market relapsing and remitting MS, including Novartis’ ($NVS) Gilenya and Biogen’s ($BIIB) Avonex.

GeNeuro said it is also looking to tackle other autoimmune diseases, including CIDP (chronic inflammatory demyelinating polyneuropathy)--an orphan neurological disease--and Type 1 diabetes with its candidate.

Geneva-based GeNeuro came into life after being spun out of the Institut Mérieux in 2006 and has received ongoing funding from the institute. In 2014, it also signed a deal potentially worth $450 million with fellow French company Servier. The drugmaker paid $47 million upfront to help run the biotech’s Phase IIb study of its MS drug.

In return, Servier got an option on ex-U.S. and Japanese rights that are tied to a $408 million package of milestones--along with the option buy an equity stake in the biotech.

Servier in fact took up this option late last year, becoming a minority shareholder in GeNeuro by purchasing shares from existing shareholder Eclosion, which helped spin off the company. GeNeuro also saw a milestone payment of $40 million (€37.5 million) from Servier for the completion of its recent Phase IIb study for GNbAC1, with Servier agreeing to pay for the next stage of Phase III studies.

Jesús Martin-Garcia, chairman and CEO of GeNeuro, said: “We are delighted to announce our successful IPO on Euronext's regulated market in Paris. The IPO will help GeNeuro step up its developments in multiple sclerosis along with its growth in Europe and the U.S., but also in new autoimmune indications.

“GeNeuro is a Swiss company with a very strong presence in France, including research and development centres in Lyon and Savoie region. Listing on Euronext’s Paris market, which has in recent years become the leading European financial centre for biotechnology companies, was therefore the natural choice for our company.”

This comes after two failed attempts from Denmark’s Bavarian Nordic and the Paris-based biotech GenSight, which both dropped their IPOs in the U.S. this week due to the ongoing headwinds in the IPO market.

GeNeuro is not unique in getting its public offering away, as the U.K.’s Shield Therapeutics and Californian biotech Corvus successfully raised their IPOs this year, although at a fairly substantial discount.

Euronext was merged with the NYSE back in 2007 and floated itself in 2014.

- see the release