Alder BioPharmaceuticals Hits IPO Trail Looking for $115M

3/19/14Follow @benthefidler

Alder BioPharmaceuticals grabbed some headlines late last year when a rheumatoid arthritis drug it’s been developing with Bristol-Myers Squibb showed some early signs that it might have a chance to challenge established treatments for the ailment. Now the Bothell, WA-based company is trying to ride that momentum into the public markets.

Alder intends to raise as much as $115 million through an IPO and trade on the Nasdaq under the ticker symbol “ALDR.” The company would use a large portion of that cash to help push forward an antibody drug it’s developing to treat migraines. Credit Suisse Securities (USA), Leerink Partners, Wells Fargo Securities, and Sanford C. Bernstein are underwriting the offering.

Alder has raised $111.4 million in equity financing since its inception in 2004. With a 23.7 percent stake, Sevin Rosen Funds holds the largest chunk of stock. Ventures West 8 (14.7 percent), Novo A/S (12.1 percent), HIG Venture Partners (11.8 percent), Delphi Ventures (11.4 percent), and TPG Biotechnology Partners (11.4 percent) are also big shareholders.

Alder was formed in 2004 by executives of Celltech R&D, based around a yeast-based antibody production system (MabXpress) that is supposed to be cheaper than other biotech drugmaking platforms, while enabling the company to hit molecular targets that the industry has found historically tough to attack with antibodies. Alder got its big break in 2009 when New York-based Bristol-Myers (NYSE: BMY) agreed to pay $85 million up front and as much as $1.35 billion overall to grab rights to clazakizumab, an antibody that binds to the inflammatory protein IL-6, for all potential uses except cancer. To date, Alder has bagged only $103.5 million from the partnership, so a lot more cash could be on the way if the drug progresses.

Alder and Bristol-Myers have been developing clazakizumab to treat rheumatoid arthritis, trying to create an alternative to rheumatoid arthritis blockbusters adalimumab (Humira) and etanercept (Enbrel), which work by binding to a different protein, tumor necrosis factor. Bristol-Myers presented positive results from a Phase 2b study of clazakizumab in October, and is targeting a further dose-ranging Phase 2b trial later this year before taking the drug candidate into Phase 3 testing (assuming the data hold up).

Alder’s bigger financial bet, however, is on its in-house antibody drug candidate for migraine prevention, known as ALD403. The drug targets calcitonin gene-related peptide—the same target that others like Arteaus Pharmaceuticals (recently acquired by Eli Lilly) and Amgen are also going after with competing treatments. The company owns full rights to ALD403, is developing both intravenous and subcutaneous forms of the drug, and plans to kick off a mid-stage study later this year to pick a dose that it could take into Phase 3 testing. About $37 million of the IPO cash would help fuel that trial, according to Alder’s prospectus.

Alder had about $23.2 million in cash as of Dec. 31.

Ben Fidler is Xconomy's Deputy Biotechnology Editor. You can e-mail him at bfidler@xconomy.com Follow @benthefidler

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