Relypsa pitches $126M IPO as lead CKD drug nears moment of PhIII truth

Just weeks away from reporting key endpoint data from a Phase III trial of its lead therapy, Relypsa has mapped out plans to go public, shooting for a $126.5 million payday to help complete a prospective transformative leap into marketing.

The IPO is built around patiromer, a new therapy for hyperkalemia which is designed to flush out high levels of potassium in the blood. The S-1 makes the case that the current dietary response to high potassium--which commonly afflicts patients with chronic kidney disease--is inadequate and the only approved therapy is poorly tolerated among patients. And the Santa Clara, CA-based biotech touted its late-stage data demonstrating that its drug can be effective in treating the disease, with pivotal endpoint data due out in the next quarter.

Underscoring just how expensive this kind of R&D work can be, Relypsa has burned through $193 million of investors' cash to get to this point. Without a positive readout of Phase III data, as well as a near-term approval from the FDA, the company will face a severe test. And even under the best circumstances, the company expects to spend up to $80 million just getting to the launch pad.

Investors, though, have been more focused on rewards than risk this year, the polar opposite of the chill felt since the 2008 financial crisis. Even after Prosensa's newly issued stock blew up ($RNA) a few days ago after a Phase III failure of its Duchenne muscular dystrophy drug--partnered with GlaxoSmithKline ($GSK)--IPOs for Foundation Medicine ($FMI) and Ophthotech ($OPHT) have gone gangbusters, raising hundreds of millions of dollars.

A total of 37 biotechs have gone public so far this year, raising close to $2.8 billion. This is far and away the best IPO year for the industry since 2000 and a major improvement over 2012, as biotech offerings were beginning to make a comeback.

OrbiMed owns the largest chunk of equity, with 43%, followed by 5AM (23%), Delphi (11.8%), New Leaf (10.4%) and Sprout Capital (9.7%). Executive officers and directors have about 5% of the shares. FierceBiotech named the company a Fierce 15 biotech in 2008.

- here's the S-1

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