Women’s health biotech ObsEva sets terms for $87M IPO

Fountain on Lake Geneva
A photo of Geneva, Switzerland, where IPO hopeful ObsEva is based

ObsEva has set the terms for an IPO that could net it in the region of $87 million (€81 million). The haul, around half of which will come from insiders, will enable ObsEva to move a treatment for heavy menstrual bleeding associated with uterine fibroids into phase 3 in the coming months.

Geneva, Switzerland-based ObsEva, which grew out of the closure of Merck KGaA’s site in the city, is hoping to sell close to 6.5 million shares for between $14 and $16 a piece. If ObsEva sells out its overallotment, the IPO could gross close to $120 million. But, without the boost from offloading these extra shares, the net figure after costs is likely to clock in at close to $87 million.

To get it toward that target during a lean period for IPOs, ObsEva is leaning heavily on existing investors. Medicxi plans to buy $15 million shares. And other, unidentified shareholders are in line to invest $30 million. Such support has been critical to getting IPOs off the ground over the past year or so, particularly for biotechs working outside of hot areas such as cancer and CRISPR.

ObsEva is a long way from these fields. The Swiss biotech plans to allocate $49 million to its lead candidate, an oral gonadotropin-releasing hormone (GnRH) receptor antagonist. The candidate, OBE2109, has moved to the cusp of phase 3 as a treatment for heavy menstrual bleeding associated with uterine fibroids. Two phase 3 trials are due to start in the first half of this year. ObsEva is also evaluating the candidate in a 330-person phase 2b trial as a treatment for pain associated with endometriosis.

The choice of indications pits ObsEva against some notable competitors. AbbVie spent last year racking up positive data on its GnRH antagonist, teeing it up to file for FDA approval in pain related to endometriosis this year. Astellas is also developing a GnRH antagonist in endometriosis, while Myovant is pursuing the same target in both indications as ObsEva. Allergan is closing in on a filing for FDA approval in uterine fibroids, too, albeit with an asset with a different target than OBE2109.

ObsEva thinks OBE2109 is capable of carving out a niche in this competitive landscape. The company’s faith in the candidate is underpinned by a belief its personalized, anytime, once-daily dosing will give it an edge over rivals that need to taken twice a day, with food or at a dose that is set for the general population, not their specific characteristics. ObsEva also sees OBE2109 as a standalone treatment, whereas some of its rivals may have to be taken with estrogen.

If this faith in OBE2109 is misplaced, the consequences would be severe for OvsEva. The company is working on two more candidates, OBE001 and OBE022, but question marks hang over both programs.

OBE001 is set to enter phase 3 in women undergoing IVF in the first half of this year, but it is doing so on the back of a failure in phase 2. The study failed to show a significant increase in pregnancy rates six weeks after embryo transfer. Despite that, ObsEva is advancing the program, in part on the strength of a post-hoc analysis. ObsEva is committing $11 million to OBE001.

A further $8 million of the IPO funds are earmarked for OBE022, a treatment for preterm labor that is yet to advance beyond phase 1.