The sentiment for biotechs trying to go public these days continues to be lukewarm. Witness Dimension Therapeutics, which couldn’t hit its IPO pricing goal despite a cadre of big name investors and ties to one of gene therapy’s scientific pioneers.
Cambridge, MA-based Dimension sold 5.5 million shares at $13 apiece on Wednesday and will make its debut on the Nasdaq tomorrow under the ticker symbol “DMTX.” That’s good for a $71.5 million haul before discounts due to underwriters, but Dimension was aiming to price those shares slightly higher at $14 to $16 each.
It’s been a similar story for several other biotechs to go public of late, as biotech valuations have come tumbling down amidst all the drug pricing talk in Washington. Edge Therapeutics (NASDAQ: EDGE), Mirna Therapeutics (NASDAQ: MIRN), and CytomX Therapeutics (NASDAQ: CTMX) all held IPOs in October, and all had to sell shares at a discount to complete their deals. Unlike Edge and Mirna, however, Dimension did not “upsize” its deal—sell more shares than originally intended, and therefore create more dilution among shareholders—to hit its financial target.
Dimension is now at least the eighth gene therapy company to go public over the last two years. The others are Bluebird Bio (NASDAQ: BLUE), Spark Therapeutics (NASDAQ: ONCE), UniQure (NASDAQ: QURE), Avalanche Biotechnologies (NASDAQ: AAVL), Celladon (NASDAQ: CLDN), Applied Genetic Technologies Corp. (NASDAQ: AGTC) and most recently, RegenXBio (NASDAQ: RGNX). Voyager Therapeutics, which just outlined its own IPO plans, could soon join the group.
That all these companies have held IPOs since 2013 is a testament to the of renaissance of gene therapy, a method by which viruses are genetically engineered and used as little delivery vehicles—“vectors”—to carry specific genetic instructions and correct defects in patients’ DNA.
While gene therapy seems far more viable than it did five or ten years ago, the mixed results of the past year have underlined how far the field has to go. There have been positive data from companies like Bluebird, UniQure, and most recently Spark. And there have been clinical trial failures at Avalanche and Celladon that have caused dramatic changes in each company’s trajectory.
While Spark’s gene therapy, for a rare blindness, appears poised to be the first ever to undergo an FDA review next year, the field’s biggest questions still loom large: how long will these treatments last, and how much will they cost?
The truth is, particularly when it comes to staying power, no one knows yet. Bluebird, for instance, said earlier this week that the first patient with beta-thalassemia—a crippling blood disease that can lead to anemia—treated with an earlier version of its gene therapy technology back in 2007 had recently required two blood transfusions. The patient had gone seven years without needing one, and while Bluebird made clear the vectors its using now are far superior—meaning, presumably, treatment should last longer—that remains to be seen.
Dimension will wrestle with the question of therapy longevity as well, if and when it begins its first trial. The company is developing gene therapies for two rare metabolic disorders associated with the liver, ornithine transcarbamylase (OTC) deficiency and glycogen storage disease type 1a. It is also working on treatments for hemophilia A and B. Dimension’s hemophilia B program (DTX-101) is its most advanced and is expected to begin clinical testing by the end of this year. It’s one of at least seven gene therapy treatments being developed for hemophilia B, as you can read here.
Dimension wouldn’t exist without RegenX, which it now joins on the public markets. Dimension has a license to use several of the adeno-associated virus, or AAV vectors owned by RegenX. It’s a sort of validation of the work of gene therapy pioneer James Wilson, who co-founded RegenX.
Dimension’s largest shareholders before the IPO were Beacon Bioventures Fund (a fund managed by Fidelity Biosciences, 36.1 percent stake), OrbiMed (26.8 percent), and New Leaf Venture Partners (5.7 percent).