2 early-stage biotechs gun for $175M as IPO waters remain warm

If there’s one thing that’s bucking the downward market trend during this pandemic, it's the biotech IPO, and now we have two more phase 1 companies ready to go public.

First up is ALX Oncology Holdings, a next-gen cancer biotech that launched in 2015 seeking a $100 million IPO to add to its recent $105 million funding round.

The Dublin- and California-based biotech has so far had a good year and, back in February, just after its series C round, grabbed an FDA speedy tag for its leading candidate ALX148 for the first-line treatment of patients with head and neck squamous cell carcinoma and for the second-line treatment of patients with HER2-positive gastric or gastroesophageal junction carcinoma.

CD47 myeloid checkpoint inhibitor ALX148 is now in line for phase 2 trials in combination with other anti-cancer therapies.

Multiple drug developers have gone after CD47 since evidence of its role in the interactions between cancer cells and the immune system became clear. The evidence suggested tumors evade immune attacks by upregulating CD47, leading researchers to posit that blocking the signal will expose cancer cells to a full-force offensive.

However, efforts to realize the therapeutic potential of anti-CD47 antibodies have been undermined by hematological adverse events stemming from the fact the target is found on host cells such as red blood cells.

ALX, formerly known as Alexo Therapeutics, thinks fusion protein ALX148 has a better risk-benefit profile than its rivals and has persuaded investors to buy into that idea.

Some of its more recent data were from patients with relapsed or refractory non-Hodgkin lymphoma (NHL) who received ALX148 in combination with rituximab. Among the 21 evaluable patients, ALX saw an objective response rate of 43% and a median progression-free survival of 7.3 months. As importantly, the drug appeared to be relatively safe and well tolerated.

The phase 1 trial that generated the lymphoma data is continuing, with other arms of the study testing the CD47 prospect in combination with Herceptin and Keytruda in solid tumor patients. But, with ALX148 coming through its first test in NHL, ALX also has plans to take the candidate deeper into the clinic.

The biotech said in a Securities and Exchange Commission (SEC) filing that it now also plans to advance ALX148 into a phase 1b/2 trial in combination with Vidaza (azacitidine) for myelodysplastic syndromes by the end of 2020 and a phase 1b/2 trial in combination with standard-of-care agents for acute myeloid leukemia in 2021.

It plans to list on the Nasdaq under the symbol "ALXO."

The second IPO attempt is a $75 million effort from autoimmune biotech Pandion Therapeutics. Since it uncloaked two years ago, Pandion has teamed up with Astellas on bispecific drugs for Type 1 diabetes and has pushed its lead program into the clinic.

Back in April, it raised $80 million to test that treatment in patients with ulcerative colitis and move a second program into phase 1.

Cambridge, Massachusetts-based Pandion set up shop with its so-called TALON platform to create better treatments for autoimmune conditions, in which the immune system “forgets what the self is” and attacks its own tissues and organs. It aims to replace old-school systemic immunosuppression—which can lead to side effects like an increased risk of infection or cancer—as well as newer anti-cytokine antibodies, which have improved care for some patients but don’t work for all autoimmune diseases.

Its lead asset, PT101, is a combination of an interleukin-2 mutein effector module with a protein backbone and is designed to selectively expand regulatory T cells systemically without activating proinflammatory cells, such as conventional T cells and natural killer cells.

“We are initially developing PT101 for the treatment of patients with moderate-to-severe ulcerative colitis, or UC, and are currently conducting a Phase 1a clinical trial of PT101 in healthy volunteers, with final data expected in the first half of 2021,” the biotech said in its SEC-1 filing.

Using its TALON platform, it added it would also “continue to develop and expand our library of effector and tether modules as part of our early stage research and discovery pipeline.”