Stoke Therapeutics is the latest biotech company to debut on Wall Street, raising $142 million to test an experimental therapy for a rare form of epilepsy.
Stoke does not yet have any human data to show investors, but the Bedford, MA, company was still able to sell more shares than it planned—and at a higher price. Tuesday evening, the company sold approximately 7.8 million shares for $18 apiece. Stoke had planned to offer 6.7 million shares in the range of $14 to $16 each. Those shares are expected to begin trading on the Nasdaq exchange Wednesday under the stock symbol “STOK.”
Stoke aims to treat rare inherited diseases caused by protein deficiencies. The company is developing drugs that coax cells to make more of a protein that is produced in insufficient amounts. The company intends to accomplish this with drugs that regulate messenger RNA, the molecules that carry the genetic instructions that cells use for making proteins.
Stoke’s lead drug, STK-001, is in development for Dravet syndrome, a severe form of epilepsy characterized by long seizures. Treatment for the disease includes seizure medications. The only FDA-approved drug for Dravet is cannabidiol (Epidiolex), a syrup developed by GW Pharmaceuticals (NASDAQ: GWPH) to reduce seizure frequency.
STK-001, an intrathecal injection into the spinal fluid, is intended to treat the root cause of Dravet rather than targeting its symptoms, Stoke says. But the company notes in its IPO filing that cannabidiol blazed an approval pathway for STK-001, defining seizure goals that Stoke’s drug can follow.
Up to $39 million of the IPO proceeds will be used to advance STK-001 through the start of a Phase 3 study, Stoke says in its filing. The company will enroll its clinical trials with the help of genetic testing firm Invitae (NYSE: NVTA). The San Francisco company is offering free epilepsy testing for any child 5 years old or younger who has had an unprovoked seizure. Stoke expects to enroll approximately 36 children and adolescents in an observational study. Those patients will be eligible for Stoke’s Phase 1/2 study, which is expected to start in the first half of next year. Preliminary data from that study are expected in 2021.
Between $34 million and $37 million of the IPO cash is earmarked for research and development of other drug candidates. In its filing, Stoke says it has identified approximately 2,900 monogenic, or single-gene, diseases that could be addressed by the company’s proprietary technology. Stoke estimates that the IPO proceeds will be enough to last through 2022.