Prometheus Biosciences argues that current treatments for inflammatory bowel disease are inadequate and has taken a “one-size-fits-all” approach that ignores biological differences. The biotech company takes a precision medicine approach to intestinal diseases in order to target specific groups of patients with medication and accompanying diagnostics. Now, $ 190 million in IPO cash is available to help advance this research.
Prometheus Biosciences has valued its stock offering at $ 19 per share, the high end of its revised price range. On Monday, the San Diego-based company set terms on an offer of more than 7.3 million shares in the range of $ 16-18 each. On Thursday, Prometheus raised its target to 9 million shares in the range of $ 18 and $ 19 respectively. When the Prometheus finalized the IPO late Thursday night, it kept the high end of the revised range but increased the offering by another 1 million shares. These stocks trade on the Nasdaq under the symbol “RXDX”.
Prometheus’ precision medicine technology is called Prometheus360. The platform includes a gastrointestinal database and a biobank with samples from patients with IBD and other gastrointestinal diseases. The biobank, exclusively licensed by Cedars-Sinai Medical Center, contains more than 20,000 samples collected for more than 20 years. The company says in its IPO prospectus that applying machine learning techniques to these samples enables it to discover and develop precision therapies and companion diagnostics. This approach is intended to make clinical development faster and more efficient.
“Clinical IBD development programs can take up to seven to ten years to complete, and clinicians are often faced with the task of enrolling patients from a limited pool of qualified candidates into a large number of studies with undifferentiated mechanisms of action,” the company said of the IPO Registration. “By using companion diagnostics to target a specific subset of the IBD population, we expect a reduction in overall development time and costs through smaller studies and faster registration rates.”
Prometheus’ lead drug candidate, PRA023, is an antibody designed to block tumor necrosis factor-like cytokine 1A (TL1A), a protein that is involved in IBD. The company says its drug has the potential to help IBD patients whose disease is predisposed to high levels of TL1A expression. Prometheus is developing the drug for two types of IBD, ulcerative colitis and Crohn’s disease.
Last December, the company started a phase 1a study in healthy volunteers. If these tests show the drug is safe, Prometheus expects a phase 2 randomized, placebo-controlled study will be conducted in the third quarter of this year. Patients with moderate to severe ulcerative colitis will be included in this study. The company will also start an open phase 1b trial in patients with moderate to severe Crohn’s disease. Data from both studies are expected in the second half of 2022.
In addition to IBD drug research, Prometheus is developing a companion diagnosis that can identify patients who are predisposed to higher TL1A expression so that they are more likely to respond to the experimental drug. The Company plans to begin clinical evaluation of this diagnosis with the Phase 2 Ulcerative Colitis and Phase 1b Crohn’s Disease tests of PRA023. Two other programs in the Prometheus pipeline are preclinical. PR600 and PR300 each address different targets associated with IBD.
With the money from the IPO, Prometheus plans to spend about $ 60 million on its lead drug candidate. An additional $ 15 million is earmarked for PR600, which the company expects to enter Phase 1 testing.
Prometheus was originally founded in 2016 under the name Precision IBD. In 2019 the company changed its name to Prometheus Biosciences. The name change came after the acquisition of Prometheus Laboratories and other assets of Nestlé Health Science, a unit of the multinational food and beverage conglomerate Nestlé. Prometheus Laboratories provided laboratory-developed tests that gastroenterologists use to monitor disease in IBD patients to help make treatment decisions as per the IPO filing. The diagnostic services business was spun off at the end of last year.
Prometheus is currently working with Takeda Pharmaceutical to develop a companion diagnosis for an unspecified drug target. The Japanese pharmaceutical company also has the option of selecting an additional drug target. Takeda pays to develop and commercialize all drugs it develops for IBD. Prometheus is responsible for developing and marketing all diagnostic products resulting from the partnership. The prepayment was not disclosed when the deal was announced in 2019, but IPO filing shows that the payment to Prometheus was $ 1.5 million. Biotechnology can receive up to $ 47.9 million in development and regulatory milestone payments for each goal covered by the partnership, as well as additional payments from marketing and sales milestones. In total, Prometheus earns up to $ 420 million from milestones.
Prometheus’ largest shareholder is Cedars-Sinai, who, according to the prospectus, will own 13.8% after the IPO. Nestlé is the second largest shareholder with 10.3%.
Longboard Pharma IPO raises $ 80 million for neuroscientific drugs
In other biotech IPO news, Longboard Pharmaceuticals raised $ 80 million for its neurological disease drug pipeline. San Diego-based biotechnology has set its offering of 5 million shares at $ 16 each, the high end of its target price range. The company’s shares trade on the Nasdaq under the symbol “LBPH”.
Longboard was spun off from Arena Pharmaceuticals last year and its small molecule drug candidates come from the Arena technology platform. These drugs target G-protein coupled receptors (GPCRs), proteins of interest to some neuroscientific biotech companies. Longboard’s main program, LP352, is currently in Phase 1 testing for the potential treatment of developmental and epileptic encephalopathies, including Dravet syndrome and Lennox-Gastaut syndrome, two rare forms of epilepsy.
Last month, Longboard began testing multiple doses in the study. According to the IPO registration, preliminary data are expected in the second half of 2021. The company expects to continue testing phase 1a / 2b in the first quarter of 2022. Longboard has earmarked between $ 21 million and $ 25 million of IPO proceeds to develop this compound pending completion of Phase 1a / 2b testing.
Two other compounds are preclinical. LP143 is designed for neurodegenerative diseases associated with neuroinflammation caused by the activation of immune cells called microglia. LP659 is a potential treatment for a number of central nervous system disorders associated with neuroinflammation. Longboard has allocated up to $ 12 million for the LP143. Up to $ 10 million is earmarked for the LP659. In the filing, the company says the IPO proceeds combined with the cash reserves are expected to fund operations for the next two years.
Before going public, Arena held a 33.4% stake in Longboard. According to the submission, Arena’s stake is 23.5% after the share offer.
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