Spring Bank Pharma, Oncobiologics discount IPOs

Nasdaq tower

Hep B specialist Spring Bank Pharma and biosimilar biotech Oncobiologics have both become the latest companies to file discounted IPOs.  

First up, Cranbury, NJ-based Oncobiologics--which is developing biosimilars of blockbuster drugs, including AbbVie’s ($ABBV) autoimmune treatment Humira and Roche’s ($RHHBY) cancer therapy Avastin--plans to raise $60 million by offering 5 million shares at a price range of $11 to $13.

Insiders intend to purchase $20 million worth of shares in the offering, according to Renaissance Capital. At the midpoint of the proposed range, Oncobiologics would command a fully diluted market value of $274 million.

But this is around half of the $115 million it had originally hoped to get when it first announced its public plans back in January--and follows a common pattern of biotechs having to discount their price in order to get their IPOs off during the past two quarters.

Its SEC filing listed two drugs that have wrapped Phase I, putting them on the threshold of a Phase III to convince regulators that they were just as good as the originals: ONS-3010 (Humira, or adalimumab) and ONS-1045 (Avastin, or bevacizumab). Six more drugs are in preclinical development.

The company believes that the stakes are worth the risks, citing $1.4 billion in biosimilar revenue for antibody copies for last year against projected revenue of $56 billion in 2030.

Its last funding round saw it rake in $31 million--but a Phase III study can run anywhere from $70 million to $90 million, hence the need for more cash.  

The biotech’s president and CEO Pankaj Mohan currently owns around half of the shares in the company, while Indian-based Strides Pharma owns about a tenth.

The biotech was founded back in 2010 and said in its SEC filing that it plans to list on the Nasdaq under the symbol $ONS. It is expected to price next week.

Apart from the private funding that it has raised, Oncobiologics has also garnered $23 million in collaboration deals for ex-U.S. and European markets, centering on India, China and Mexico.

And it's trying to rework a deal that gives Zhejiang Huahai Pharmaceutical a joint participation in the U.S. on ONS-3010 in order to keep the biggest pharma market for itself.

Meanwhile, the Hep B and antiviral biotech Spring Bank Pharmaceuticals has also lowered the proposed deal size for its previously postponed IPO.

The Hopkinton, MA-based company now plans to raise $15 million by offering 1.2 million shares at a price range of $12 to $14. Insiders intend to purchase $8 million worth of shares in the offering, also according to Renaissance Capital.

The company had previously filed to offer 2.9 million shares at a range of $13 to $15. At the midpoint of the revised range, Spring Bank Pharmaceuticals will raise -63% less in proceeds than previously anticipated.

The biotech plans to list on the Nasdaq under the symbol $SBPH, and is expected to price on 5 May.

Its principal stockholders include Vancouver-based BioHEP Technologies Peter Lacaillade Jr., managing director of private investments at SCS Financial.

The company is working on its small molecule nucleic acid hybrid, or SMNH, chemistry platform--small segments of nucleic acids that are designed to selectively target and modulate the activity of specific proteins or enzymes implicated in various diseases.

Its lead SMNH product candidate, SB 9200, has been designed to selectively activate the host cellular proteins, RIG I and NOD 2, which have been implicated in the body's immune response to viral infections.

Spring Bank said it believes that SB 9200 can play an “important role in antiviral therapy” by modulating host immune response to fight viral infections such as HBV, HCV and RSV.

Last November the biotech announced a clinical trial collaboration with Gilead ($GILD) for a hepatitis B Phase II study with SB 9200 in combination with Viread for HBV patients.

There are however already a number of Hep B treatments on the market and in development, including vaccines from Glaxo ($GSK) and Merck ($MRK), with Dynavax ($DVAX) also seeking an approval for its new HBV vax later this year.

This month three biotechs had to pull their IPOs due to a difficult market, while a host of others since the start of 2016 that have managed to go public have been forced to discount their offering.

-check out Oncobiologics SEC filing
-take a look at Spring Bank Pharmaceuticals’ SEC papers