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Synthorx Gets $131M in Upsized IPO for Synthetic Biology Drugs

Xconomy San Diego — 

Synthorx, which is working to develop cancer and autoimmune therapies using technology that allows it to expand the genetic alphabet, raised $131 million in an upsized IPO on Thursday.

The company sold more than 11.9 million shares at $11 apiece. Nearly 1.8 million additional shares are available for its underwriters to purchase.

Synthorx, headed by president and CEO Laura Shawver, had planned to sell 9.1 million shares for between $10 and $12 each. The company’s shares are expected to start trading on the Nasdaq today under the stock symbol “THOR.”

Synthorx’s IPO continues the prolonged positive run for initial biotech stock offerings, which began in 2013 and has yet to slow down. Healthcare overall has been the most active sector of a hot IPO market this year with 76 total IPOs, according to IPO research firm Renaissance Capital. As of Thursday, a total of 188 IPOs had priced in 2018—20.5 percent more than on the same date the year prior, according to the Renaissance data. Proceeds were up 30.4 percent year over year to $45.7 billion.

Cash continued to flow to newly minted public biotechs on Thursday night. Synthorx’s IPO was preceded Thursday by Cambridge, MA-based Moderna’s $604.3 million initial stock offering—by far the largest ever for a biotech.

At Synthorx, reseachers are developing enhanced versions of proteins called cytokines, which regulate immune and inflammatory responses. The company uses technology licensed from The Scripps Research Institute (TSRI) in 2014 to insert a new DNA base pair into E. coli bacteria and make a variety of synthetic amino acids. It calls these “optimized” biologics Synthorins, which it believes could improve upon existing treatments for cancer and autoimmune diseases.

The discoveries that underpin its investigatory products were made in Floyd Romesberg’s lab at TSRI.

Synthorx says it will use the IPO proceeds to fund development of its lead product candidate, THOR-707, which is meant to be a better version of interleukein-2, an approved treatment for multiple forms of cancer. The drug is in early stage clinical testing, and Synthorx hopes to develop other similar products as well.

In the prospectus, the 25-person company said it plans to study THOR-707 as a treatment for solid tumor cancers on its own and in combination with an immunotherapy known as a checkpoint inhibitor. It plans to file paperwork in the second quarter of 2019 to start human testing, and subsequently launch a phase 1/2 clinical trial.

Synthorx is based at COI (for Community of Innovation) Pharmaceuticals, an incubator in the San Diego community of La Jolla that provides shared facilities and management for portfolio companies of Avalon Ventures, a founding investor of Synthorx.

Avalon (and its affiliated entities) was the company’s largest stockholder before the IPO, owning nearly one-third of its shares. Boston’s RA Capital Management (and affiliated entities) and New York private equity firm OrbiMed were the next two largest shareholders, with about 28 percent and 22 percent, respectively. Correlation Ventures, also a founding investor, had about 6 percent.

The company raised $63 million in April in a round led by OrbiMed and joined by Medicxi and Osage University Partners. Avalon and Correlation Ventures, another founding investor, also joined the round, along with earlier investor RA Capital.

Synthorx spent about $15.7 million on R&D since the start of 2016 through Sept. 30, according to its prospectus. As of Sept. 30, the company had $20.6 million in cash.