Orphan disease drug developer Chiasma raised $101.8 million in its initial public offering, $20 million more than the upper end of the Newton, MA-based biopharma company’s previous projection.
Chiasma (NASDAQ: CHMA) is using most of the money to build out its U.S. sales and marketing operations as it readies itself for the potential launch of its lead therapy that targets acromegaly. The condition, which can lead to death, is caused when the pituitary gland releases excess human growth hormone, subsequently elevating the body’s insulin levels.
It increases the size of bones in the limbs and face. Andre Roussimoff, better known as Andre the Giant, suffered from it. The condition is typically treated with injectables, and Chiasma is seeking to gain regulatory approval of an oral treatment.
Chiasma has completed a Phase 3 trial for a drug, oral octreotide, which is a natural inhibitor of human growth hormone. It submitted a new drug application on June 15 to the FDA, and already has orphan drug designation.
It is one of multiple companies developing therapeutics based on peptides that can be swallowed like pills instead of injected into the bloodstream. Peptides can have certain capabilities chemical drugs lack and can reach targets that protein-based drugs can’t—but they are fragile and break down easily in the body, as Xconomy’s National Biotech Editor Alex Lash wrote in a story about Protagonist Therapeutics.
Protagonist, which announced a $40 million venture round today, is testing its drug in inflammatory bowel disease. Celgene (NASDAQ: CELG) is paying $7.2 billion deal to buy San Diego’s Receptos (NASDAQ: RCPT), which is studying its lead drug candidate in late-stage trials for ulcerative colitis and multiple sclerosis. Ulcerative colitis is an inflammatory bowel disease that can damage the colon.
Chiasma also plans to use some of the proceeds on pursuing a Phase 3 trial in Europe for the treatment, as well as starting a Phase 2 trial for it in treating neuroendocrine tumors, Chiasma said in regulatory filings. The company also plans to select a second product candidate in 2016, and initiate pre-clinical development of a third the following year, it said in a filing.
In the IPO, Chiasma sold 6.4 million shares at $16 per share. It had hoped to sell 5.4 million shares for $13 to $15 each.
The stock opened at $20.50, and rose to $21.61 as of 11:40 a.m. in New York.