[Corrected 3/10/17, 3:27 pm. See below] Gene therapy developer Tocagen is preparing an initial public stock offering to finance clinical trials of its experimental treatment for a form of brain cancer.
The San Diego-based biotech filed the paperwork Thursday for an IPO that could raise up to $86 million—a figure likely to change as the company determines how many shares it will sell, and at what price. Tocagen has applied to the Nasdaq Exchange for a listing under the stock symbol “TOCA.”
Tocagen is focusing on high-grade glioma, the most common form of brain cancer and one that tends to recur in patients even after treatment with chemotherapy drugs. An estimated 160,000 new diagnoses of high-grade glioma are expected this year, Tocagen says in its filings. Approximately 14,000 of those cases will be in the United States.
Gene therapies are experimental treatments that transplant normal genes into cells to correct missing or defective ones. The approach is meant to provide a lasting effect, though no gene therapies have yet been approved in the United States. Spark Therapeutics (NASDAQ: ONCE) is vying to become the first FDA-approved gene therapy with an experimental treatment for of an inherited retinal disease that causes blindness. Spark’s approach targets a defective gene that causes the disease.
But developing new treatments for brain cancer has proven difficult so far. Needham, MA-based Celldex Therapeutics (NASDAQ: CLDX) halted work on its experimental brain cancer vaccine last year after an independent monitoring board determined that company’s treatment wouldn’t work.
Tocagen has developed a “cancer-selective” way to deliver therapeutic genes to the DNA of cancer cells. The company’s lead therapeutic candidate has two components that work together to form a potent anti-cancer compound: injectable vocimagene amitretroprevec (Toca 511) and an extended release version of 5-fluorocytosine (5-FC), an antifungal drug administered as a pill. The idea is to use the two components to turn cancer cells into tiny factories churning out anti-cancer agents.
Vocimagene amitretroprevec carries the coding that enables cancer cells to produce cytosine deaminase (CD), a protein derived from yeast that does not occur in humans. The fluorocytosine pills are ingested and carried through the bloodstream, across the brain barrier and into the cancer cells. Tocagen says cancer cells that take in the CD gene produce the CD protein. That protein then converts the fluorocytosine into the cancer-fighting compound 5-fluoracil. Tocagen says its approach is highly localized to the cancer cells. The company adds that its technology platform has the potential to be used alone as well as in combination with other cancer immunotherapies.
Tocagen has treated 126 brain cancer patients with its gene therapy approach in three dose-ranging Phase 1 clinical trials. The company has also started the Phase 2 part of a planned Phase 2/3 trial. In its prospectus, Tocagen says it will use proceeds from the stock offering to finance manufacturing and validation of both components of its experimental gene therapy as it continues its Phase 2 clinical trials in recurrent high-grade glioma. Tocagen also plans to test its therapy in a Phase 1b clinical trial for patients newly diagnosed with high-grade glioma, and potentially in other cancers, including metastatic colorectal, pancreatic, breast, lung, melanoma, and renal cancers.
The core technology that forms the basis for Tocagen’s gene therapy was licensed from the University of Southern California. In 2010, the company raised nearly $8 million as it developed its treatment. To date, Tocagen says it has raised $131.4 million in funding, mainly through private placement sales of convertible preferred stock. Tocagen was co-founded by gene therapy pioneer Harry Gruber, who served as the biotech’s CEO from the company’s start in 2007 until last November. Gruber, a successful serial entrepreneur in San Diego, is now Tocagen’s president of research and development. The company’s CEO is Martin Duvall, who was most recently chief commercial officer of Ariad Pharmaceuticals. [Corrected to reflect Duvall’s position at Ariad.]
In 2016, Tocagen reported spending $27.2 million in research and development expenses. Tocagen’s filings show that the biotech had $31.2 million in cash as of Dec. 31.