How strong is the appetite for biotech IPOs? PTC Therapeutics, whose lead drug, ataluren, has already failed two big clinical trials, has priced an offering near the high end of its projected range.
South Plainfield, NJ-based PTC sold nearly 8.4 million shares this morning at $15 apiece, for a total of about $125 million. PTC expects to see about $114.2 million after certain deductions. PTC’s stock will debut on the Nasdaq today under the symbol “PTCT.” The price fits towards the high end of PTC’s projected range of $13 to $16 per share, and was upsized from the 6.9 million shares it initially hoped to sell to investors.
JP Morgan and Credit Suisse are PTC’s joint bookrunners. Its underwriters also include Cowen and Co. and Wedbush Securities.
PTC has raised about $160 million in VC financing, according to its IPO prospectus. Credit Suisse First Boston Equity Partners is its largest shareholder, holding 14.7 percent of the company prior to the IPO. Next are HBM Healthcare Investments (12 percent), Vulcan Ventures (8.9 percent), Brookside Capital (7.1 percent), and Celgene (7.0 percent).
PTC is developing a drug called ataluren, which is designed to block the effects of so-called “nonsense mutations,” or single-point alterations in genetic code that stop patients from forming fully functioning proteins. Such mutations are the catalyst for a number of genetic diseases, but PTC has initially targeted subgroups of patients with Duchenne Muscular Dystrophy, a degenerative muscle disease, and cystic fibrosis—specifically, those whose diseases are caused by nonsense mutations. PTC estimates that about 13 percent of DMD cases in the U.S. (some 2,000 people) and 10 percent of cystic fibrosis cases (3,000 people) are caused by nonsense mutations.
Even so, PTC has a checkered history in bringing ataluren along, and a lot of uncertainty remains about its prospects. PTC wooed Genzyme to form a major collaboration around the drug in 2008—the now-Sanofi unit shelled out $100 million upfront for rights to the drug everywhere but the U.S. and Canada, and promised another roughly $350 million—but Genzyme returned those rights three years later after the drug failed to hit its main goal in a mid-stage clinical trial in patients with nmDMD, or those whose DMD is attributed to a nonsense mutation. (Genzyme kept an option to commercialize the drug in other disease types.) PTC also flunked a late-stage study of ataluren in nmCF (cystic fibrosis patients).
PTC still sought conditional approval of ataluren in patients with nmDMD from the European Medicines Agency in October, but was shot down by regulators. Further, the EMA posed a laundry list of potential hurdles to approval of ataluren in Europe: among them are “insufficient efficacy” from the trial, and uncertainties about the right dose of the drug, according to the prospectus.
Despite those questions, PTC has charged ahead into a Phase 3 study in patients with nmDMD, feeling that the previous trial helped give it the information to design the right study to show that ataluren can produce statistically significant results. PTC expects top-line data from the trial in the middle of 2015, and hopes to begin selling the drug in the U.S. and Europe in 2016.
DMD is becoming a crowded field, with many believing that Sarepta Therapeutics—which just yesterday showed more encouraging results from a small trial of its drug, eteplirsen—has the inside track. Prosensa, which also intends to go public, is also developing a DMD drug with the help of GlaxoSmithKline.
PTC, meanwhile, also has collaborations with Roche and the SMA Foundation to develop a preclinical drug for spinal muscular atrophy, a rare inherited central nervous system disease. Roche paid PTC $33 million up front as part of the deal; the company could receive $460 million more if it hits various milestones.