Novartis-backed GenSight Biologics latest victim of IPO volatility

Another day, another ditched IPO--this time for gene therapy specialist GenSight Biologics that pulled its attempt to go public this week, citing as others have those pesky “market conditions.”

The writing was already on the wall for the Parisian biotech as in November, it postponed plans to go public after repeatedly downsizing its ambition. It had initially looked for a $100 million IPO in mid-2015, but gradually scaled this down to just $65 million by offering 4.7 million shares at a price range of $13 to $15.

Now, the IPO is completely off the table, along with its potential ticker “GNST”, with the biotech telling the Securities and Exchange Commission (SEC): “The Company [GenSight] has determined at this time not to proceed with the offering contemplated by the Registration Statement due to market conditions.” It added that it is now considering whether to go for a private offering.

In a developing trend, it’s had more luck with VC funding and last summer, the company closed a $36 million Series B preferred stock financing round. This cash has gone towards funding late-stage trials for its lead product candidate, GS010, which targets Leber’s Hereditary Optic Neuropathy (LHON).  

The treatment works by fixing a DNA glitch that leads to LHON, using a harmless virus to deliver a corrective copy of the ND4 gene. The drug already has orphan status on the U.S. and EU, with around 4,000 people in the U.S. estimated to have the disease--about 100 new cases are added to this patient population each year.

There is currently only one approved gene therapy in the western world in the form of uniQure’s ($QURE) Glybera, which the EMA green lighted back in 2012 for the rare blood-clogging condition lipoprotein lipase deficiency. The drug costs around $1 million per treatment.

Glaxo ($GSK) is also set to see its gene therapy Strimvelis approved later this year in Europe for severe combined immunodeficiency due to adenosine deaminase deficiency (ADA-SCID)--aka “bubble boy syndrome,”, which affects just 350 people worldwide. Both companies have found it more testing to go through the FDA approval route.

Strimvelis has a similar delivery method to GS010, as GSK’s drug also uses a virus to insert copies of a gene (in this case, ADA) into stem cells extracted from the bone marrow of patients. The cells are then reintroduced to the patient, who can expect to start making the gene on their own, repairing their immune system.

The London firm told FierceBiotech this month it would be charging “significantly less” than $1 million for its new therapy--but these types of rare and ultra-rare treatments are known for their high price tags, and high revenue.

The biotech started Phase III testing for the drug in LHON in Feb., with the first set of results expected next year--but it will likely need more funding to help continue the costly late-stage study program.

GenSight is also at work on GS030, a preclinical gene therapy for retinitis pigmentosa, the vision-destroying disease that affects about 1.5 million people around the world.

This candidate uses viral vectors to introduce a DNA sequence that spurs the production of a photosensitive protein, thereby partially restoring patients’ ability to see. GenSight is developing the treatment in tandem with a set of “biomimetic goggles” designed to stimulate the re-engineered retinal cells and allow RP sufferers to see in daylight. It had been slated to start trials this year.

Novartis ($NVS) is the biotech’s largest shareholder, with a 20% stake, followed by Abingworth and Versant, which hold about 17% each. The company launched back in 2013.

This is the second biotech in as many days to walk away from an IPO, coming hot on the heels of Bavarian Nordic’s decision to pull the plug on its potentially $86 million offering. Denmark’s BN told FierceBiotech is was now however seeking a $100 million private placement.

This comes during a tough quarter for IPOs, with a number of biotechs either giving up or taking major discounts when going public. In contrast, VC funding for the industry is enjoying a notable boom, with the $450 million Moderna Therapeutics managed to secure from investors in Jan. being an example of just how much cash appears to be around.

- see Renaissance Capital’s take
- check out its withdrawal docs with the SEC
- have a look at FierceBiotech’s report on the VC funding boom