Agios selling $86M IPO to fund its first cancer drug trials

Cambridge, MA-based Agios Pharmaceuticals has raised a pile of cash from venture groups and Celgene ($CELG) in recent years. And now it's headed to the public market to see if it can raise $86 million more in an IPO, pitching a drug development platform that has yet to undergo testing in the clinic.

Agios has garnered close attention for taking a new approach to treating cancer and a group of orphan genetic metabolic diseases. Investigators for the company have been working on preclinical programs for small molecules that can disrupt cellular metabolism, targeting specific mutated metabolic enzymes found in a range of cancers. One of its lead programs--AG-221--is bound for the clinic about now, while AG-120 is expected to begin a human study in early 2014.

Celgene was drawn into a partnership back in 2010, and since then has invested $37.5 million in equity and $141.2 million in collaboration payments--a collective $178.7 million. And Celgene isn't satisfied. Agios says in its S-1 to the SEC that Celgene has committed to buy a chunk of IPO stock as well.

Unlike many preclinical biotech companies, Agios--a 2009 Fierce 15 company--hasn't had trouble attracting cash. The company grabbed $121 million upfront in its discovery deal with Celgene, which followed up with an additional $20 million payment to extend its exclusive deal from three years to four years. Including its $33 million Series A round and a $78 million third-round of financing in 2011, the company has raised more than a quarter of a billion dollars in funding. Arch Venture Partners, Flagship Ventures and Third Rock Ventures have all invested. With 23.65% of the company's shares, Third Rock holds the largest chunk of Agios stock.

But Agios has had problems to deal with as well. The Abramson Family Cancer Research Institute at the University of California filed suit against former scientific director Craig Thompson--a prestigious cancer researcher now CEO of Memorial Sloan-Kettering--in early 2012, claiming that he used their IP to secretly launch Agios. The university claimed it had been hurt to the tune of $1 billion, but later agreed to settle, keeping the terms quiet.

Agios racked up a net loss of $20 million last year, with CEO David P. Schenkein earning total compensation of $698,000.

- here's the S-1

Special Reports: Agios Pharmaceuticals - 2009 Fierce 15 | Top 10 biotech IPOs of 2012