Unfazed by a tough market, PhaseRx, Gemphire go for IPOs

Two biotechs are seeking to float in two separate offerings worth $90 million as both look to shrug off the bad luck of other companies that had to ditch their IPOs in the past week.

First up, Northville, MI-based Gemphire Therapeutics has filed for a $60 million offering as it looks to continue its trials into potential new therapies for the treatment of dyslipidemia, which can raise the risk of cardiovascular events. The Pfizer-backed biotech, which was founded in 2014, plans to list on the Nasdaq under the symbol “$GEMP”.

Meanwhile, the preclinical biotech PhaseRx has filed with the SEC to raise up to $30 million in its initial public offering. The Seattle-based company was founded in 2006 and plans to list on the Nasdaq under the symbol “$PZRX.”

These biotechs are looking to buck the trend of a recent downturn in the biotech IPO market, with three companies: GenSight, Bavarian Nordic and BioCardia, all in the past week deciding to halt their IPOs due to difficult market conditions.

BN in fact this week said it had raised nearly $100 million in a private placing--getting more than the $86 million it had sought with its float, which it ditched last Wednesday. It’s not all been doom and gloom in the IPO sphere however, with the Servier-backed GeNeuro pulling off a €33 million float on the Euronext last week.

So what are these two daring biotechs about? Well, Gemphire Therapeutics targets so-called “bad cholesterol” with its lead candidate gemcabene (CI-1027)--a once-daily pill for patients who are unable to achieve normal levels of LDL-C or triglycerides with statins.The drug has been licensed from Pfizer ($PFE) in a deal reached in 2011--with the U.S. giant also owning 2.1 million shares in the company. 

Gemcabene's mechanism of action is designed to increase the clearance of very low-density lipoproteins (VLDLs) in the plasma and inhibit the production of fatty acids and cholesterol in the liver. Gemcabene is liver-directed and inhibits apolipoprotein C-III (apoC-III) protein in the liver and may inhibit acetyl-CoA carboxylase (ACC) in the organ.

The drug has been tested in 18 early and midstage studies (mainly by Pfizer before it out-licensed the drug) across nearly 900 subjects, and has “demonstrated promising evidence of efficacy, safety and tolerability”, according to the company.

There are already many, many statins on the market capable of reducing LDL-C and triglyceride levels--but Gemphire believes that many patients are unable to effectively manage their dyslipidemia with currently-approved therapies, and are in need of better treatment alternatives.

For example, the company points out, around 40% of patients on statins are unable to meet their LDL-C lowering goal--and while doubling a statin dose has shown to incrementally lower LDL-C levels by a nominal percentage, this increases safety and tolerability concerns.

It believes its drug can be safer and that gemcabene “possesses a differentiated product profile compared to other therapies in the market and in clinical development”. It is also keen to point out that as a small molecule formulated as a tablet, gemcabene is cheap to manufacture. As a once-daily therapy, it could also prove more convenient than other non-statin therapies, some of which require frequent injections or multiple daily doses.

“We will take a value-based approach to pricing across the target indications,” the company said in its SEC filing, as it already looks ahead to pricing. Money raised will go toward running three planned late-stage studies for the drug, with an end End of Phase 2 (EOP2) meeting with the FDA in the second half of 2017. The company adds that it will need further funds in the future to complete its trial program. 

Meanwhile, PhaseRx said it will use any cash boost to help pay toward further research in its targets for inherited enzyme deficiencies in the liver, as well a condition known as urea cycle disorder, which can lead to excess ammonia in the blood. There is currently no cure for the disease with liver transplants the only course of action that can correct the disorder in most cases.

The Seattle biotech said it is seeking to undertake further preclinical work with its candidates and scale up its manufacturing.

But it will still need much more for human testing in the future. As the company says in its SEC filing: “Even with the expected net proceeds from this offering, we do not expect to have sufficient cash to complete the clinical development of any of our product candidates or, if applicable, to prepare for commercializing any product candidate that is approved.”

Its initial focus is on urea cycle disorders and it has three preclinical candidates using intravenous delivery of mRNA that makes the relevant missing urea cycle enzyme inside the cell, thus reinstating normal control of blood ammonia.

PhaseRx said it hopes to achieve preclinical proof of concept for the treatment of one of these urea cycle disorder drugs for further development and eventual commercialization in the first half of this year.

The company said its other candidates are intracellular enzyme replacement therapies, or i-ERTs, and if it gets the funding it needs, it is looking to show its clinical safety and efficacy data in 2018.

The company added: “We are not aware of any other enzyme replacement therapies for intracellular enzyme deficiencies currently being marketed for inherited enzyme deficiencies in the liver, and believe that the commercial potential for i-ERT is completely untapped and similar to the large and growing $4 billion worldwide market for conventional ERT, which includes drugs such as [Sanofi’s Gaucher disease therapy] Cerezyme.”

But PhaseRx said it is looking to do things differently, and its i-ERT approach works by delivering normal copies of the mRNA that make the missing enzyme inside the liver cell, thereby reinstating the normal physiology and correcting the disease using its Hybrid mRNA Technology platform.

It’s been funded primarily through a series of private placements and has raised around $47.4 million to fund its operations. It’s also been given a $1.5 million upfront fee from its former research partner Synageva BioPharma (now owned by Alexion) in 2014--this deal has now however been scrapped. The company doesn’t produce any revenue as yet and saw losses of $7.4 million last year, with its debt just shy of $50 million.

- see PhaseRx’ SEC filing
- check out Gemphire Therapeutics’ S-1 filing