Cortendo swings for $86M IPO to fuel late-phase orphan drug R&D drive

Cortendo has followed through on its long-gestating plan to list on Nasdaq. The Swedish-American biotech is pitching to raise $86 million (€76 million) to pump into a pair of late-phase trial programs, the more advanced of which could lead to a regulatory submission in the back half of 2017.

Cortendo CEO Matthew Pauls

When combined with the $54.4 million it had in the bank as of the end of June, Cortendo thinks the IPO haul will give it enough cash to advance its two lead candidates toward approval. The near-term success of Cortendo rests on COR-003, a treatment for endogenous Cushing's syndrome that is due to deliver Phase III data in the first half of 2017. If all goes according to plan, Cortendo will include the data in the aforementioned regulatory filing that is penciled in for later that year. COR-003 is a single enantiomer of ketoconazole, a now off-patent drug physicians have used off-label to treat Cushing's.

Cortendo plans to advance COR-003 along the 505(b)(2) regulatory approval pathway, allowing it to reference FDA's historic take on the safety and efficacy of ketoconazole to support its case. The idea has proved compelling enough to help Cortendo persuade investors to part with their cash. An $11 million bridge financing landed in Cortendo's bank account in October, three months after which it pocketed a further $27.5 million. Investors chipped in another $33.2 million in May to support the acquisition of a pair of Phase II acromegaly treatments.

The buyouts gave Cortendo the makings of an orphan drug portfolio, something that is central to CEO Matthew Pauls' attempts to pitch the company to IPO investors as a U.S.-focused rare disease specialist. A slice of the anticipated IPO windfall will go toward advancing one of the recently acquired assets into late-phase trials. The R&D program for COR-004, the new name for the drug Cortendo picked up from Australia's Antisense Therapeutics for $5 million, is due to receive a post-IPO cash injection. Depending on what regulators have to say, Cortendo will push the drug into either Phase II or III.

Cortendo paid far more for its other acromegaly drug, now known as COR-005, but it is somewhat further from bothering regulators. The asset, which Cortendo paid $30 million for, is due to enter a dose-ranging study in the wake of the IPO. 

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