Insiders help Strongbridge limp to a downsized $25M IPO

Strongbridge Biopharma ($SBBP) has struggled through choppy conditions to complete a $25 million (€22 million) listing on Nasdaq. The rare disease player pulled off the dramatically downsized IPO by relying heavily on the support of existing shareholders, who snapped up 80% of all the shares sold.

Strongbridge CEO Matthew Pauls

Swedish-American biotech Strongbridge was hoping to raise as much as $86 million when it filed its papers last month but ultimately fell well short of this target. The IPO could have failed to go ahead altogether without the support of existing shareholders. Strongbridge made no mention of current backers committing to buy stock when it updated its F-1 at the end of September. Yet by the time it came to the crunch, it had persuaded existing shareholders to part with $20 million, enabling it to pull off the IPO despite raising just $5 million from new financiers.

The gulf between what Strongbridge hoped to raise and what ultimately landed in its bank account has necessitated a revision of its spending plan. Strongbridge, which had $54.4 million in cash at the end of June, had intended to allocate $12 million to a Phase III trial of COR-003 in endogenous Cushing's syndrome, a sum that would have seen the study through to completion. Now, with just $5 million earmarked for the program, Strongbridge has downgraded its expectations. The funding will support the "continuation" of the trial.

Strongbridge has also slashed the amount it is setting aside for the development of its acromegaly treatments, COR-004 and COR-005. The assets, which Strongbridge acquired in a pair of deals earlier this year, were set to share out $29 million but will now have to make do with $5 million each. Despite cutting its planned investment, Strongbridge made no changes to the wording of what it wants to achieve using the cash. The company is still aiming to take COR-004 through to the start of a Phase II or III trial--depending on what regulators want--and prepare COR-005 for the clinic. 

- read the F-1/A

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