After a Phase III flop, Acucela plots a $120M Japanese IPO

Seattle's Acucela is still stinging from a late-stage failure that partially soured its relationship with partner Otsuka, and now the biotech is taking an unusual step to stay afloat, planning a $125 million IPO on the Tokyo Stock Exchange.

Unlike most of this year's biotech IPO entrants, Acucela is already profitable thanks to a series of collaborations with Otsuka, and the Japanese drugmaker owns a 13% stake in the company. However, September's Phase III failure of the dry eye treatment rebamipide--the duo's most promising asset--has put Acucela in a tough spot, and the company is cutting 35% of its workforce by year's end to save cash.

Now the biotech is looking for $125 million to move the needle on its two remaining Otsuka-partnered drugs: emixustat, a Phase IIb/III pill to treat dry age-related macular degeneration, and OPA-6566, a Phase I eye drop for glaucoma. With rebamipide in the rear-view, emixustat is Acucela's best bet, and with an FDA fast-track designation in the bag, the biotech is working to make its drug the first approved treatment for dry AMD.

American companies don't often go public in Japan, to say the least, and the IPO-tracking Renaissance Capital found no precedents for Acucela's cross-continental move in its database, an analyst told The Seattle Times. That said, the Japanese market has been strong all year, according to Renaissance, and 6 companies have raised more than $100 million on the Tokyo Stock Exchange.

Meanwhile, the once-roiling stateside market for biotech IPOs has largely settled down. The most recent entrants, TetraLogic ($TLOG) and Kindred Biosciences ($KIN), faced scaled-back share prices and delays on their way to Wall Street. Still, more than 40 drug developers have raised north of $3 billion in IPOs this year in the best market for biotechs since 2000.

- read the S-1
- check out the Seattle Times story

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