Erytech pushes ahead with plan to file IPO on Nasdaq to fund cancer pipeline

Erytech (EPA:ERYP) is poised to become the latest in a long line of European biotechs to head to Wall Street in search of cash. The proposal marks an escalation of the cancer biotech's long-running flirtation with U.S. investors, which has already seen it set up on the OTC market and tap stateside sources for its previous fundraising round.

Erytech CEO Gil Beyen

Lyon, France-based Erytech has yet to finalize the timing or pricing of the IPO but has outlined its plans in a brief regulatory filing. Having seen its share price rise by 150% over the past year on the back of positive data from a Phase III trial of its acute lymphoblastic leukemia (ALL) treatment, Erytech now has a market cap north of €250 million ($275 million) and aspirations to file for approval in Europe later this year. Tapping U.S. investors for cash could help finance the push for approval, while also providing capital for the advancement of Erytech's four other clinical trial programs.

At the last count, Erytech had €30.6 million in cash, a sum that is the result of a similarly sized capital increase the company completed late last year. More than two-thirds of the 2014 capital increase came from U.S.-based investors that specialize in life sciences, a group Erytech will be targeting again in its IPO. If everything goes to plan, Erytech will emerge from the IPO with an inflated bank balance to finance its multifront oncology clinical trial program, the most advanced components of which are working their way through Phase II studies.

The clinical-phase pipeline at Erytech is based upon testing Graspa--the drug that is nearing approval in ALL--in a variety of indications. Phase II trials of Graspa in acute myeloid leukemia and pancreatic cancer are underway, while the drug is also nearing Phase I in patients with diffuse large B-cell lymphoma and solid tumors. A U.S.-focused trial in ALL is active, too. The success of the trials rests on the strength of the science underpinning Graspa, which is designed to starve cancer cells of nutrients by destroying asparagine.

The idea of treating cancer with an asparagine-destroying enzyme has been around for decades--it has been sold by Lundbeck (CPH:LUN) as Elspar and Jazz Pharmaceuticals ($JAZZ) as Kidrolase--but Erytech has a twist on the concept that it thinks can improve its safety profile. Erytech encapsulates the enzyme inside a red blood cell, inside which the destruction of asparagine takes place. Data from an expanded access program running in France suggest ALL patients who are unable to tolerate the traditional form of the enzyme can receive multiple doses of Erytech's product.

- read the release