Investors committed to digging deep to support the latest biotech IPO, yet again. But the strategy seems to be working. Gene therapy player Audentes Therapeutics ($BOLD) priced at the midpoint of its range, raising $75 million, and then proceeded to move up about 10% in early trading on July 20.
Existing venture investors committed to investing up to $30 million in the IPO; it has an impressive roster of VCs including OrbiMed Advisors, 5AM Ventures, Versant Ventures, Sofinnova Venture Partners and Deerfield Management.
The preclinical gene therapy company expects to use its IPO proceeds to get a trio of rare disease candidates into Phase I/II testing, with preliminary data for all three anticipated in the second half of next year.
Audentes works on rare diseases caused by a single gene defect. Its gene therapy is designed to deliver a functional copy of the infected gene into cells, leading to normal protein production. The trio headed for the clinic include AT132 for the treatment of X-linked myotubular myopathy, or XLMTM, AT342 to treat Crigler-Najjar syndrome, AT982 to treat Pompe disease and AT307 to treat the CASQ2 subtype of catecholaminergic polymorphic ventricular tachycardia (CPVT).
The company’s candidates are based on adeno-associated viruses; it in-licensed that technology for various vectors from RegenxBio ($RGNX) under a deal that dates back to 2013. Its Crigler-Najjar candidate is based on work from the University of Pennsylvania. The University of Florida Research Foundation and the Fondazione Salvatore Maugeri (FSM) each also contribute tech to Audentes for Pompe disease and CASQ2-CPVT, respectively.
The FSM rights were acquired last August when Audentes bought Cardiogen for $4.2 million in cash plus another $5.8 million tied to the election of the candidate. In addition, Cardiogen shareholders received 1.3 million in Audentes shares.
Thus far, Audentes had been relatively cash efficient, losing $51.2 million from its 2012 inception through the end of the first quarter. It already had $80.3 million in cash at March 31, with a net loss of $10.5 million during the first quarter.
Much of the new IPO cash is earmarked for the clinical trial of AT132 to treat XLMTM, which is shaping up as its lead candidate. There is no treatment for the disease, which is characterized by muscle weakness and respiratory failure; and about half of children with it die within their first 18 months. AT132 is expected to improve outcomes by improving skeletal muscle for these patients after a single IV administration. It has been studied in mouse and canine models.
Biotech IPOs have been a mixed bag of late, with a couple of recent IPOs trading down. The top performer among recent IPOs has been pulmonary hypertension player Reata Pharmaceuticals ($RETA), which is up almost 70% since its May IPO. The Audentes IPO sold 5 million shares for $15 each.
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