Tokai pitches a $75M IPO to fund its three-in-one cancer drug

Cambridge, MA's Tokai Pharmaceuticals is joining the IPO queue with eyes on $75 million, cash that would get its triple-threat prostate cancer treatment into Phase III trials.

The drug, galeterone, is currently in a Phase II study on 144 patients with castration-resistant prostate cancer, and Tokai intends to kick off a late-stage study in the first half of 2015, eventually taking advantage of its FDA fast-track designation. In interim data released in May, Tokai's drug charted clinically meaningful reductions in prostate-specific antigen, a common biomarker used to chart patient response.

The mid-stage study, called ARMOR2, should wrap up in September, and, if its IPO works out, Tokai plans to pour most of its new funds into Phase III, targeting patients who aren't getting effective treatment from the banner prostate cancer treatments approved over the past few years.

The market leaders, Johnson & Johnson's ($JNJ) Zytiga and Astellas and Medivation's ($MDVN) Xtandi, brought in more than $2.1 billion last year, and Tokai believes galeterone can contend for dominance thanks to its three-part mechanism of action.

In order to grow, prostate tumors need testosterone and dihydrotestosterone (DHT) to bind to androgen receptors. To disrupt that process, J&J's drug inhibits the enzyme CYP17 and thereby reduces testosterone synthesis, while Xtandi works from the other direction as an androgen receptor antagonist, blocking the necessary binding and starving tumors. Tokai's drug does both, combining those two mechanisms and adding a third: androgen receptor degradation, which the company believes can lower the risk of treatment resistance.

The biotech intends to trade on the Nasdaq under "TKAI," and it's yet to disclose how many shares it intends to offer or a projected price range.

Meanwhile, the industry's record-setting performance on Wall Street has taken a turn for the volatile, forcing many hopefuls to delay, discount or call off their debuts. But biotechs with differentiated assets and clear-cut paths to success are still managing to make it out of biotech's tightening IPO window, including Sage Therapeutics ($SAGE) with its up-sized $90 million haul; Kite Pharma ($KITE) and its $128 million debut; and Zafgen ($ZAFG), which raked in $96 million to support its obesity treatment.

- read Tokai's filing

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