In Biotech, Everyone’s Going Public. What’s Your Excuse?

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approval in Europe, but the path to U.S. approval would take longer, according to Zohar.

I asked Zohar what market conditions would prompt Gelesis to try for an IPO again. He declined to answer, but said that “there [had been] enough demand to price” the previous attempt. “For strategic reasons we decided to wait.”

Kolltan Pharmaceuticals. Kolltan of New Haven, CT, seemed like an IPO shoo-in. One of its founders, Joseph “Yossi” Schlessinger, is chair of pharmacology at Yale University, and his decades of work have helped build a major field of cancer drug development: inhibition of kinases, which are a family of enzymes with diverse roles in driving cancer and other diseases. The dozens of kinase inhibitors already approved include ones that previous companies backed by Schlessinger helped bring to market.

Schlessinger co-founded Sugen—the source of two approved drugs now at Pfizer, which acquired it during industry consolidation in the early 2000s—and Plexxikon, creator of a mutation-specific therapy for melanoma, vemurafenib (Velboraf). (Daiichi Sankyo bought Plexxikon for $805 million upfront in 2011 and shares vemurafenib rights with Roche.)

Kolltan aims to build a pipeline of monoclonal antibodies that inhibit a subset of kinases called receptor tyrosine kinases. There are antibody drugs that go after cancer by shutting down kinase activity, perhaps most famously Genentech’s trastuzumab (Herceptin) and bevacizumab (Avastin), but a company dedicated to the specialty is unusual.

We don’t know what made the company withdraw its IPO try in January 2015. The official notice didn’t give a reason, and the company declined to comment when contacted for this story.

Could it have been too early? When Kolltan declared its intentions to go public, in September 2014, it was just barely clinical stage, still in Phase 1 with KTN3379, a compound it licensed from AstraZeneca’s MedImmune division. But being early   hasn’t prevented biotechs from going public during this boom. (And in May, the company said the Phase 1 data were strong enough to move the drug into multiple Phase 2 trials.)

The company has seen major losses—$92 million in three years—but hey, it’s biotech.

There’s also a notable amount of founder ownership. When last reported, Schlessinger, Altschul, and CEO Gerald McMahon together owned more than 12 percent of the company, nearly as much as the top institutional shareholder, Fidelity (14 percent). (There’s the crossover.)

But with the founders’ track record, those oddities seem mild. Often companies will “dual-track”—plan an IPO while talking to potential acquirers—and it’s possible Kolltan, thinking a buyout was imminent in January, pulled its IPO. But six months later, there’s no deal.

As of September 30, it had $53 million in the bank. It has not disclosed any new financing plans since January’s IPO withdrawal.

Dance Biopharm. Inhaled insulin is a product that could change the lives of millions of diabetics. It’s also the arena for some of biopharma’s most spectacular flubs. Pfizer got the flub-train rolling nearly a decade ago with Exubera, the inhaler that was approved in 2006. It had no safety problems, but $12 million in sales and one year later Pfizer voluntarily pulled it from the market. (Here’s a great article about the disaster, accompanied by a picture worth a thousand words. No one wanted an inhaler that looked like it was left behind by Cheech and Chong.)

In the wake of Exubera, Novo Nordisk and Eli Lilly (NYSE: LLY), two diabetes powerhouses, pulled the plug on their inhaled insulin programs. Next up was Mannkind (NASDAQ: MNKD), a Los Angeles-area company that first asked FDA to approve its Afrezza product in 2009. Approval finally came in June 2014, and Mannkind’s partner Sanofi (NYSE: SNY) began selling it earlier this year (with, it should be noted, a much smaller inhaler than Exubera). So far, sales are dismal. Updated numbers should come when Sanofi reports second quarter earnings on July 30.

Along comes Dance, of Brisbane, CA, headed by John Patton, a founder of Nektar, which was behind the inhalation technology of Pfizer’s Exubera. (Nektar was originally known as Inhale Therapeutic Systems.)

Dance has been working on turning inhalable insulin into a mist, rather than a dry powder, which Afrezza uses and Exubera used. (Dry powder can cause throat irritation and cough, which Dance’s product aims to avoid.)

Dance filed to go public in April 2014, then withdrew its effort in October with no explanation. At the time of the most recent public filing, CEO Patton owned 43 percent of the company. (It has since raised more private capital.)

The company did not respond to requests for comment. So what could have made its IPO try go awry? In its first public filing April 2014, the company said it planned to start a worldwide Phase 3 trial for type-2 diabetes in mid-2015. To date, nothing has begun—or at least been publicly announced.

Between Dance’s first public IPO notice in April and its withdrawal in October, Mannkind received FDA approval for Afrezza. Could that have complicated Dance’s IPO chances? Dance itself had been of two minds about the potential effect of an Afrezza approval, as noted in its prospectus: “If Afrezza is approved, MannKind will have a first-to-market advantage over us, which will impair our ability to compete. If the FDA does not approve Afrezza, our ability to raise capital and our business prospects could be impaired.”

Perhaps the concern about competition resonated too well with public investors. Or, if Afrezza ultimately falters, Dance will convince enough people that there’s still the need for an inhaled insulin solution.

MultiVir. The boom has been good to the developers of all kinds of cutting-edge therapies, not least of which is gene therapy. UniQure (NASDAQ: QURE), Bluebird Bio (NASDAQ: BLUE), and Spark Therapeutics (NASDAQ: ONCE) have all gone public.

But MultiVir, of Houston, did not. It filed its first public notice this March. On May 27, it sent the SEC its withdrawal notice. MultiVir CEO Robert Sobol told me that the week MultiVir had its road show, San Diego gene therapy firm Celladon (NASDAQ: CLDN) reported a Phase 3 failure for its heart-failure treatment. (That was on April 27.)

Instead of a postponement, MultiVir reacted to what Sobol called … Next Page »

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