Xenon pitches Genentech, Teva 'extreme genetics' ties as it rolls out a $52M IPO

Xenon Pharmaceuticals has gone 8 long years since its last equity raise, relying on a slate of partnerships with some of the biggest names in the business to fund its work. And now it's set out to test the fall biotech IPO market with a $52 million offering designed to take the company down another stage of its journey through the clinic.

In its S-1 filing, Xenon says it raised $140 million through nondilutive partnership payments--while burning through $114 million for research--from Genentech, Merck ($MRK) and Teva ($TEVA). And there's another $1 billion in potential milestones to gain from these deals, which emerged from the company's "extreme genetics" approach to rare diseases. Its researchers specialize in identifying single-gene defects that can be targeted by therapeutics, an approach that made the company an early partner with uniQure ($QURE) on Glybera, the world's first and only approved gene therapy.

Its most advanced program is TV-45070 (formerly XEN402), which Teva has in a Phase IIb trial for osteoarthritis, with 300 patients. Genentech, meanwhile, is prepping GDC-0276 for a Phase I study for pain. Partnered back in 2011, Genentech has paid $23 million so far in developing the program, with another $613 million in milestones up for grabs. And back in the spring, Genentech came back for a second program on pain genetics, identifying phenotypes associated with an inability to perceive pain or spontaneous pain. Genentech paid $1.5 million for the upfront in that deal and committed to making a $5 million private placement with the IPO.

Xenon may face a challenge in getting through the IPO window this fall. Investors have become increasingly choosy after the market welcomed dozens of new offerings over the past two years. Now lesser known biotechs are increasingly likely to cut share prices in the face of weak demand, while the stars continue to do extremely well. Xenon now gets to find out where it sits in that range.

The biggest single shareholder at Xenon is MX Associates, with 16.2% of the company. Lipoterx controls 11.4% of the stock, while InterWest has 8.8% and FMR has 6.9%. CEO Simon Pimstone has a 4.2% stake in the biotech.

The company plans to trade on Nasdaq as $XENE.

- here's the S-1

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