Regado CEO moves the goal line after a rare biotech IPO misfire

It's time for Plan B at Regado Biosciences.

Last month the biotech's Plan A was to go public and raise the money needed--about $75 million--to finish a Phase III trial it was launching with venture cash. But even as some biotechs with no human data at all were being feted on Wall Street with over-the-top IPOs, the Phase IIb-proud Regado wound up having to slash its share price ($RGDO) from a projected range of $14 to $16 a share to a mere $4.

In the end, the Basking Ridge, NJ-based biotech grossed a total of $47 million. Combined with its last $51 million round, that should be enough to get the company's late-stage study, estimated to cost a whopping $140 million to $150 million, to an interim analysis. And CEO Dave Mazzo says the company can then raise more cash--or perhaps find itself the big partner at the kind of terms that have so far been elusive--provided the interim data inspires investors to gamble on the finish.

According to Mazzo, the big investors didn't reject Regado so much as postpone their investments. During more than 100 presentations, he adds, he encountered a lot of feedback that the company wasn't raising enough money. If they just wanted to put the cash together to get through a final readout on Phase III, Regado would be coming back for more, which didn't sit well with many of them. And he believes--and hopes--that when the interim results are in, those wary investors will jump into the game in a big way, as they said they would.

David Mazzo, president and CEO of Regado Biosciences

"Drug development by its nature is a gamble, a calculated gamble," Mazzo tells FierceBiotech. But pressed on why Regado couldn't gain entrance to the seemingly all-welcome Wall Street party for biotech, Mazzo also allows that he's still a bit mystified by it.

"If I knew why we missed we'd have hit the target goal," he says. Perhaps, he suggests, it's because Regado is engaged in a big cardiovascular study, with high regulatory hurdles and a massive bill for treating 13,000 patients--the kind of wager typically left to the Big Pharma crowd with deep pockets.

Regado is betting the farm on REG1, which uses two agents--pegnivacogin and anivamersen--to control bleeding during a coronary intervention and open heart surgery. Regado aims to prove that the combo can give physicians a tool to manage coagulation, 'dialing' the anticoagulation effect up or down to enable doctors to safely hit a maximum dose for each patient. Pegnivacogin is a Factor IXa inhibitor which can be reversed partially or completely by anivamersen. Faster, safer surgical interventions for this growing patient population come with the promise of some immediate health benefits as well as the prospect of a reduced number of adverse incidents along with lower hospitalization costs.

But Mazzo says that even at the shriveled initial share price, Regado is better off now than before the IPO. The biotech can go back and sell more shares, giving it another avenue to pursue cash. And there's enough money to get to one of those "key value inflection points" the MBA crowd love to cite. The game plan now is to execute on its Phase III, keep educating investors and move to a position where it can do a follow-on financing or partnership deal.

At the beginning of this week, the biotech may have started to see the beginning of a turnaround. On Monday, Regado's share price shot up 40% as a group of analysts initiated coverage on the company and started to highlight its research effort and prospects. And on Tuesday, the biotech announced that it had enrolled the first patient in the Phase III.  

"We did benefit," Mazzo said ahead of the recent stock move. "We raised capital and increased our financing options. In that regard, as pilots say, any landing you can walk away from is a successful landing."

The runway, though, just got shorter. -- John Carroll, Editor-in-Chief. Follow me on Twitter and LinkedIn.

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