IPOs: Ra Pharma raises $92M, as Pfizer to gain rights to Myovant

Wall Street

A couple of biotech IPOs are on tap for this week. One for Ra Pharmaceuticals ($RARX) has priced already raising $92 million, while another for Myovant Sciences has racked up sizable commitments from Pfizer ($PFE) and BB Biotech in an effort to get the deal done.

In the pharma’s case, that interest also extends into first dibs on any licensing or acquisition deal for Myovant, which is led by the former CMO of Medivation, Dr. Lynn Seely, as president and CEO. Medivation sold to Pfizer for $14 billion in September.

Rare disease play Ra priced its offering right at the midpoint of its anticipated range at $13. In an optimistic gesture, it bumped up the number of shares sold to 7 million from an anticipated 5.8 million. That enabled it to raise a whopping $92 million, up from the previously expected $75 million.

Existing Ra investors committed to buying a chunk of the deal, but only $19.5 million of it. In the proposed Myovant IPO, the company plans to raise $176 million. If it can get the deal done, that would value the women’s health play at more than $800 million.

In an unusual move, Pfizer and Swiss investment firm BB Biotech, neither of them are existing investors, have each committed to investing $30 million into the Myovant IPO.

Pfizer, perhaps even more interestingly, will gain a right of first negotiation and a board observer seat at Myovant upon the close of the sale of at least $30 million in Myovant stock to Pfizer, either as part of the IPO or as a concurrent private placement.

The first negotiation would include to license or sale of rights to develop and commercialize Myovant’s only two candidates: relugolix, which is in trials to treat heavy menstrual bleeding associated with uterine fibroids, endometriosis-associated pain, and advanced prostate cancer; and RVT-602, which is being developed to treat female infertility as part of assisted reproduction. Pfizer also gets first rights to buy Myovant or its assets.

Myovant, which has only nine employees, is held by Roivant Sciences, which holds 85% of the company while Takeda holds 12%. The company’s candidates were in-licensed from Takeda in April.

The pair officially announced the formation of Myovant in June. Roivant sits as the parent company of Myovant and Axovant, which pulled off a whopping $315 million IPO in 2015--and is worth almost $1.4 billion now. Vivek Ramaswamy is the president and chief executive officer of Roivant; he was previously an investor with QVT Financial.

As for Ra, its newly raised cash will go to back its lead candidate, RA101495, in Phase II testing. It plans to start a Phase II trial of the subcutaneous injectable to treat paroxysmal nocturnal hemoglobinuria (PNH) during the first quarter of next year with data due during the second quarter. It’s also got a Phase II trial slated for RA101495 to treat refractory generalized myasthenia gravis (rMG) lined up for the second half of 2017.

RA101495 is a synthetic macrocyclic peptide, a ring-shaped chain of amino acids, which is an inhibitor of complement component 5 (C5). This plays a key role in the rupture and destruction of red blood cells that is associated with PNH. The only approved drug for PNH is Alexion’s ($ALXN) blockbuster Soliris (eculizumab), a biweekly intravenous drug that’s a C5 inhibitor.

Ra expects that RA101495 will be a daily subcutaneous injection that, unlike Soliris, will be self-administered, thereby offering more convenience and flexibility.