The biotech IPO train is rolling on without slowing as we head into a holiday weekend. The latest to lay the groundwork to go public are Sutro Biopharma and Arvinas, which both want Wall Street’s help to back human trials of experimental cancer drugs.
South San Francisco, CA-based Sutro set a preliminary $75 million target in the IPO paperwork it filed on Thursday. Sutro has applied for a listing on the Nasdaq under the stock symbol “STRO.”
Sutro will use the IPO cash to fund its two lead cancer drugs, STRO-001 and STRO-002. Both are antibody drug conjugates, a type of therapy that links anti-cancer compounds to antibodies that home in on a tumor. These drugs are meant to deliver a targeted strike that spares healthy tissue, but only a few have made it to the market thus far.
STRO-001 targets a protein on the surface of tumor cells called CD74 in patients who have multiple myeloma and non-Hodgkin lymphoma. Sutro is currently enrolling patients in a Phase 1 study and preliminary data are expected in the middle of 2019. The second Sutro drug, STRO-002, targets folate-receptor alpha, another protein on the surface of some tumors, in patients who have ovarian and endometrial cancers. Sutro plans to file the paperwork later this year to start a clinical trial for STRO-002.
Sutro has cancer drug alliances in place with Merck (NYSE: MRK), Celgene (NASDAQ: CELG), and EMD Serono. Those partnerships have yielded $333 million in payments to Sutro so far, including $43.7 million in equity investment, according to the IPO prospectus. Sutro spent $26.8 million on R&D in the first half of 2018, leaving it with $25.4 million in cash at the end of the second quarter.
Sutro’s IPO filing comes a little more than a month after it raised an $85.4 million Series E round. The company has raised $175 million since its 2003 inception under the name Fundamental Applied Biology.
With a 12.5 percent stake, Merck is Sutro’s largest shareholder. And the pharma firm plans to buy up to $10 million in more Sutro shares at the IPO price once the company goes public, according to the filing. Other large Sutro shareholders include Alta Partners, Celgene, and Skyline Ventures.
Arvinas, meanwhile, filed for an IPO to move drugs for prostate and breast cancers into clinical trials that are expected to start next year. The New Haven, CT-based drug developer set a preliminary $100 million IPO target and applied for a listing on the Nasdaq under the stock symbol “ARVN.” Arvinas is one of several emerging biotechs including C4 Therapeutics, Cedilla Therapeutics, Kymera Therapeutics, and Nurix that are focusing on “protein degradation,” meaning they are trying to make the cell’s internal garbage disposal system, the proteasome, get rid of harmful proteins. (Here’s more on the field and its evolution.)
Multiple myeloma image by Wikimedia Commons user KGH under a Creative Commons license