Akcea Therapeutics, an Ionis Pharmaceuticals subsidiary focused on rare lipid disorders, is spinning out of its parent with plans for an initial public stock offering as it prepares to file for FDA approval for its lead drug.
The Akcea stock offering could reach as much as $100 million, according to paperwork filed with securities regulators. That figure could change as the Cambridge, MA-based company determines how many shares it will sell and at what price. Akcea has applied for a listing on the Nasdaq Exchange under the stock symbol “AKCA.”
As Akcea prepares its stock offering, the company is also set to raise funding from drug partner Novartis (NYSE: NVS). Filings show that Akcea will raise $50 million in a separate private placement that calls for Novartis to buy shares of the company at the IPO price.
Akcea was founded in 2015 as a subsidiary of Carlsbad, CA-based Ionis (NASDAQ: IONS). The company’s pipeline of four drug candidates for treating diseases caused by lipid disorders was developed using Ionis technology. The most advanced of these drugs is volanesorsen, a drug developed to treat familial partial lipodystrophy, or FPL. The National Organization for Rare Disorders (NORD) says FPL is characterized by the loss of body fat in certain parts of the body, such as the arms and legs, but not in other parts. These patients may also accumulate fat in places such as the face and neck.
The cause of FPL and its severity are rooted in a genetic mutation. According to NORD, complications of the disorder include the inability to break down glucose; high levels of triglycerides, chemical compounds that store fat; and diabetes. Some patients also experience abdominal pain and inflammation of the pancreas, called pancreatitis.
The Akcea drug was developed to reduce triglycerides. Earlier this month, Ionis and Akcea released Phase 3 clinical trial results showing that patients given the drug achieved triglycerides reductions greater than 77 percent. That effect in the 33-patient study continued throughout the 52-week treatment period. Furthermore, the companies said that patients treated with the drug experienced no pancreatitis attacks during the study. Patients treated with the Akcea drug also experienced a reduction in abdominal pain compared with those given a placebo.
The clinical trial results were consistent with earlier studies testing the drug. Phase 2 results were published in the New England Journal of Medicine. The company says the additional results from the latest trial will be presented at an upcoming medical meeting. In its IPO filing, Akcea says that the safety and efficacy data from the volanesorsen clinical trials support an application for FDA approval. Akcea plans to make that filing in the third quarter.
To date, Akcea has funded its operations with $100 million in cash supplied by Ionis in 2015, according to the filing. The company also secured a line of credit with its parent in January that allows it to borrow up to $150 million. Since its launch, the company has spent nearly $150 million on research and development.
Akcea has also received financial support through a partnership with Novartis that began in January. Novartis paid Akcea $75 million up front for the exclusive option to develop and commercialize two other drugs in Akcea’s pipeline. Akcea is responsible for taking these drugs through Phase 2 clinical trials. If one or both of these drugs make it that far, Novartis has the option to pay $150 million to license each drug. At that point, Novartis would take over responsibility for further clinical testing and could pay Akcea as much as $600 million more if the drugs hit development and regulatory milestones.
Akcea says it will use proceeds from the IPO to finance regulatory and marketing approvals for volanesorsen, as well as further clinical testing of drug candidates in its pipeline.