Optinose has filed to raise $100 million in an IPO. The filing comes days after the FDA approved the intranasal delivery specialist’s treatment for nasal polyps, the commercialization of which will be the focus of a post-IPO spending spree.
Yardley, Pennsylvania-based Optinose filed for the Nasdaq IPO to raise money to invest in the commercial infrastructure, supply chain, marketing and sales functions needed to turn Xhance into a success. Armed with an FDA approval in adults with nasal polyps, Optinose will target the 5,000 primary care physicians who prescribe 25% of the intranasal steroids used to treat the condition today. The plan is to get the device on the market in the first quarter of next year.
Optinose is pitching the Xhance nasal spray formulation of fluticasone propionate as a better option for doctors. Today, doctors use Merck’s Nasonex to treat chronic sinusitis with nasal polyps and GlaxoSmithKline’s Beconase AQ to improve symptoms in patients who have undergone sinus surgery. Optinose argues these approaches are flawed as they fail to consistently deliver the steroids to the origins of the polyps deep in the nasal passages.
To overcome these shortcomings, Optinose has combined a second-generation anti-inflammatory corticosteroid with its delivery system. The device consists of a mouthpiece and nasal nozzle. Once the patient has inserted these components into the appropriate orifices, they exhale into the device. This closes off the nasal cavity to prevent loss of drug.
Pitted against placebo in two phase 3 trials, the candidate delivered statistically significant gains against co-primary endpoints that assessed nasal congestion and polyp grade.
If the initially-targeted 5,000 physicians prove receptive to the product, Optinose will expand its marketing to cover the 15,000 physicians that treat an estimated 1.2 million Americans who have chronic rhinosinusitis with nasal polyps. Optinose thinks that is a $3.4 billion opportunity.
Optinose convinced investors including Fidelity of its ability to seize that opportunity earlier this year, enabling it to put together a $37 million series D. That round equipped Optinose to start preparing to commercialize Xhance. A successful IPO would position Optinose to complete those preparations and lay the groundwork for approvals that expand the use of the product.
A tranche of the anticipated IPO haul is earmarked for a pediatric study mandated by the FDA and clinical trials in patients with chronic sinusitis. Success in that indication would open a big market up to Optinose, which estimates 6.25 million Americans have chronic rhinosinusitis. About one-third of these patients also have nasal polyps.
The pediatric studies pose a risk, though. The FDA is making Optinose complete the trial by 2022 to provide evidence of the safety, efficacy, pharmacokinetics and pharmacodynamics of Xhance in people aged 6 to 17 years of age. This moves Optinose into uncertain territory.
“Because our EDS for Xhance was designed for use in adult patients, we may discover that the dimensions of this EDS make it unsuitable for use in pediatric patient populations. As such, this pediatric study may also require us to undergo a costly and time-consuming development process to design and manufacture as appropriate a modified EDS to conduct these studies,” Optinose wrote in its IPO filing.