Lyra Therapeutics, a biotech company developing a new way to treat your persistently runny nose, has raised $56 million in its public markets debut.
Late Thursday, Lyra offered 3.5 million shares priced at $16 apiece, which was the high end of its projected $14 to $16 price range. Those shares are expected to begin trading on the Nasdaq on Friday under the stock symbol “LYRA.”
Watertown, MA-based Lyra is developing technology that precisely delivers a drug for ear, nose, and throat (ENT) conditions and sustains that delivery for months. Lyra accomplishes this via an implantable device that has “shape memory,” meaning it is designed to adapt to the anatomy of the nasal passages. The device also uses a mesh scaffold that maximizes the surface area for the drug, along with a polymer complex that customizes the rate at which a drug is released, according to Lyra’s IPO filing.
The company’s lead research program, LYR-120, is being developed to treat chronic rhinosinusitis, a condition in which sinus inflammation leads to pain, increased drainage, and obstruction of the nasal passages. Patients who suffer from chronic rhinosinusitis can find relief from nasal irrigation or allergy medications. If they don’t work, patients can also opt for sinus surgery.
LYR-120 administers mometasone furoate, a steroid that is the active pharmaceutical ingredient in several allergy and asthma medications. The Lyra device can be implanted during a brief visit to a physcian’s office. The company says that its technology can extend the delivery of mometasone furoate for up to six months.
A Phase 2 test of LYR-120 is underway, enrolling as many as 150 patients in Australia, Austria, the Czech Republic, New Zealand, and Poland. Last December, the FDA cleared the company to open test sites in the US. But Lyra says in its IPO filing that it does not expect to open any US sites due to the ongoing COVID-19 pandemic. Preliminary Phase 2 data are expected by the end of this year, though the company says the pandemic could alter that timeline.
A second Lyra program, LYR-220, is being developed to treat chronic rhinosinusitis patients who continue to experience symptoms despite having sinus surgery. This device is similar to LYR-120, but it employs a bigger matrix for patients who have a larger nasal cavity because of the surgery. Lyra says in its filing that a mid-stage study is expected to start by the end of next year, depending on the impact of COVID-19.
According to the IPO filing, Lyra plans to use $47 million to $50 million of the IPO proceeds for manufacturing and clinical development of LYR-120 through the completion of a Phase 3 study. Another $4 million to $6 million is earmarked for development of LYR-220 through the completion of Phase 2 testing.
The origins of Lyra go back more than 10 years to when it was part of another Watertown company, Arsenal Medical. That company was founded by MIT’s Bob Langer, the inventor of many drug delivery technologies, and George Whitesides, a Harvard chemist and co-founder of Genzyme. In 2011, Arsenal placed some of its research in a newly formed company called 480 Biomedical. At the time, that spinout was developing scaffold technology to address a form of peripheral vascular disease. In 2018, 480 Biomedical changed its name to Lyra Therapeutics. The company pays homage to its heritage in its Watertown postal address: 480 Arsenal Way.
Lyra’s largest shareholders include Perceptive Advisors, which owns a 22.9 percent stake after the IPO, according to the prospectus. The post-IPO stakes of North Bridge Venture Partners and Polaris Venture Partners are 12 percent and 11 percent, respectively. Lyra is joining the public markets as the COVID-19 pandemic continues to roil financial markets. This spring has been the slowest period for public market debuts since the 2008 financial crisis, according to IPO research firm Renaissance Capital. Seven companies went public in March and April. Over the past 15 years, those two months have averaged 23 IPOs.
Despite the economic downturn, biotech has been a bright spot for IPOs. Four of the companies that went public in the past two months, including Lyra, are life science firms. Not only did ORIC Pharmaceuticals (NASDAQ: ORIC), Keros Therapeutics (NASDAQ: KROS), and Zentalis Pharmaceuticals (NASDAQ: ZNTL) successfully price their IPOs, they all also saw healthy bumps in their stock prices. Their average 82 percent return benefited from an investor focus on healthcare stocks due to the pandemic, according to Renaissance.