Cancer R&D stars pitch an $86M biotech IPO for Kolltan Pharma

The fall parade of biotech IPOs is continuing with a new pitch from Kolltan Pharmaceuticals, a 6-year-old biotech which styles itself as an expert in all things related to receptor tyrosine kinases. The New Haven, CT-based biotech--which has an impressive pedigree in cancer drug R&D--filed an S-1 outlining its plan to raise $86 million on the market, the latest swing of the bat from a group of drug developers willing to chance an offering to an increasingly picky group of investors.

Kolltan has its work cut out for itself. The biotech raised a $60 million D round last spring, but is still in Phase I studies with its lead program. Two other preclinical programs are underway, with an eye to pushing the most advanced into human studies sometime next year.

Kolltan traces its roots back to Plexxikon, which did the bulk of the R&D work on Zelboraf, a breakthrough cancer drug at the time. Daiichi Sankyo bought out Plexxikon in 2011.

Kolltan was founded in 2007 by Yale scientist Joseph Schlessinger and Arthur Altschul, two of the principals behind Plexxikon. Schlessinger and Altschul also worked on Sugen with Gerald McMahon, now the CEO at Kolltan, before Pfizer ($PFE) acquired the company. Then Sugen was shut down after the big Pharmacia buyout triggered a series of cutbacks at Pfizer, though the pharma giant continued work on Sutent through to an approval. McMahon completed a stint at Millennium, which out-licensed the lead drug, KTN3379, to Kolltan.

That lead drug is an ErbB3-targeting antibody. A Phase II study for the drug is expected to get underway in the early part of next year.

Kolltan has burned through $83 million to get through this stage. According to the S-1 it recently picked up a portfolio of work on TAM receptors for a little more than $2 million last month, which came out of the lab of Dr. Greg Lemke at the Salk Institute for Biological Studies in La Jolla.

Fidelity, which has been making some big bets on biotechs recently, stepped in with a $22.2 million investment back in March, according to the SEC filing. The other big investors included KLP Enterprises ($15 million) and entities associated with Auven. 

After the big IPO wave of 2013 and early 2014, biotech IPOs have been on a roller coaster ride. The biotechs which are considered most likely to succeed are doing well, and the rest are either dumping their plans to go public or taking some big discounts to complete their offering. Now Kolltan will find out where it sits in the crowd.

- here's the S-1

Special Report: Kolltan Pharmaceuticals - Top 20 Biotech VC Deals of 2009