WaVe, Voyager Get $170M Combined in Biotech’s Latest IPO Tests

Xconomy Boston — 

Two privately held biotechs in the Boston area priced IPOs on Tuesday with similar estimates about their value. One of them hit its mark, thanks to some help from a few insiders, but the other fell a bit short.

WaVe Life Sciences, of Cambridge, MA, priced 6,375,000 shares at $16 apiece, raising $102 million. That’s right in the middle of its projected $15 to $17 range, and WaVe sold far more shares in its deal than the 5 million it had anticipated.

WaVe got help to hit its targets. The company’s most recent prospectus, filed on Monday, shows that generics giant Teva Pharmaceutical Industries—which had no disclosed involvement with WaVe previously—promised to buy up to $30 million in WaVe shares at the IPO price.

RA Capital Management, WaVe’s largest shareholder prior to the offering with a 35.8 percent stake, also indicated plans to team with entities tied to WaVe’s directors to buy as much as another $32 million in shares. WaVe declined confirm whether Teva and RA Capital followed through on these commitments, though it would be very unusual for those deals to arise so close to the IPO only to fall apart.

Cambridge-based Voyager Therapeutics also set a $15 to $17 per share range, but came in a little short of its target. Voyager priced its offering at $14 per share, and sold 5 million shares—instead of the 4.7 million it had projected—to make up the difference.

WaVe and Voyager will both debut on the Nasdaq this morning under the ticker symbols “WVE” and “VYGR” respectively.

WaVe was formed out of the merger of two small companies: Chiralgen of Japan and Boston’s Ontorii. Its name is an amalgam of the last names of the scientific founders of Chiralgen and Ontorii: Tokyo University of Science professor Takeshi Wada and former Harvard University chemical biologist and Warp Drive Bio founder Greg Verdine.

The big bet at WaVe is that “chirality,” or chemistry’s version of handedness, matters in developing better RNA-based drugs. WaVe has developed a way to control the chirality of the RNA molecules it produces, and contends that this can lead to RNA drugs that could last longer in the body, be safer and more potent than RNA drugs at other companies.

WaVe first aims to one-up RNA-based drugs from Isis Pharmaceuticals (NASDAQ: ISIS), Celgene (NASDAQ: CELG), and Sarepta Therapeutics (NASDAQ: SRPT). For instance, it’s developing a drug that aims to reduce the levels of a toxic protein responsible for Huntington’s disease, the same goal as Isis’s ISIS-HTTrx. WaVe’s program for irritable bowel disease has the same target as Celgene’s GED-0301, which the Summit, NJ-based company acquired for $710 million last year. And WaVe’s potential treatment for Duchenne muscular dystrophy works in similar fashion to Sarepta’s drug eteplirsen and is meant for the same genetic subset of patients.

All these efforts, however, are very early. WaVe doesn’t expect to file papers for its first clinical tests until late 2016 or early 2017. It’s a long way from putting a scare into its more advanced rivals.

One intriguing development is Teva’s involvement in the IPO. The only previous connection between the two was as competitors. Through its buyout of Auspex Pharmaceuticals in March, Teva acquired a potential Huntington’s treatment that just a few days ago received a breakthrough therapy designation from the FDA.

Two of WaVe’s shareholders are Japan-based entities: Kagoshima Sinsangyo Sousei Investment (21.7 percent stake before the IPO), and founding investor Shin Nippon Biomedical Laboratories (9.5 percent), a CRO. Foresite Capital (6.8 percent) and a fund affiliated with Fidelity (6.2 percent) also held sizeable stakes prior to the offering.

Voyager, meanwhile, is developing gene therapies—a method of delivering genetic instructions into the body—for a variety of neurological diseases, among them Huntington’s and Parkinson’s. Voyager delivers these therapies via adeno-associated viruses, the most commonly used gene therapy delivery tool.

As with WaVe, Voyager is a very early stage company with big challenges ahead. No company has ever successfully delivered gene therapies to the brain or spine, which Voyager intends to do via a surgical procedure. The risks are formidable. Voyager has said in its prospectus, for instance, that in a Phase 1 trial conducted at the University of California, San Francisco for its most advanced candidate, three patients experienced hemorrhages from the brain surgery. The therapy, dubbed VY-AADC01, is meant for Parkinson’s disease patients who have not responded to treatment with levodopa, the standard of care for the disorder.

What’s more, the responses seen were also “similar to placebo effects observed in previous surgical therapies” in Parkinson’s.

Voyager is now trying to tweak the delivery, dose, and amount of gene therapy infused to get a better result, and is going to use a “modified” version of VY-AADC01 in future trials, according to the prospectus.

The Parkinson’s candidate is Voyager’s only therapy in human clinical testing. It has four other preclinical programs for Huntington’s, Friedreich’s ataxia, spinal muscular atrophy, and a form of amyotrophic lateral sclerosis, but the first of them likely won’t begin trials until 2017.

The early stage profiles of both Voyager and WaVe have provided a good test of the dampened enthusiasm biotech IPOs have encountered since summer’s end. While WaVe now has Teva in its corner, Voyager hopes to counter its relative lack of clinical experience with seasoned management and a big corporate alliance. It has a deal in place with Sanofi subsidiary Genzyme. Voyager staff is led by former Eli Lilly R&D chief Steven Paul and includes veterans of Genzyme, Biogen, and Alnylam Pharmaceuticals. It had about $169 million in cash on hand as of June 30. Boston venture firm Third Rock Ventures founded Voyager and held 52.6 percent of the company’s shares before the IPO.