CytomX Therapeutics (NASDAQ:CTMX) expects to raise $100 million in its upcoming IPO. Based in South San Francisco, California, CytomX Therapeutics is a biopharmaceutical company focused on developing treatments for cancer.
CTMX will offer 6.67 million shares at an expected price range of $14 to $16. If the underwriters price the IPO at the midpoint of that range, CTMX will have a market capitalization of $524 million. CTMX filed for the IPO on August 28, 2015.
Lead Underwriters: BofA Merrill Lynch, Cowen & Co., and Jefferies LLC
Underwriters: Oppenheimer & Co.
Business Summary
CytomX Therapeutics is a biopharmaceutical company that focuses on developing treatments for cancer. It has created a novel class of antibody therapeutics based upon its Probody technology platform, which addresses clinically validated cancer targets, such as PD-L1, in addition to novel targets CD-166.
CytomX Therapeutics, Inc. operates as an oncology-focused biopharmaceutical company in the U.S. The company develops novel class of antibody therapeutics based on its Probody technology platform that address clinically validated cancer targets in immuno-oncology, such as PD-L1, as well as novel targets, comprising CD-166.
CytomX Therapeutics has the following drug candidates in development PD-L1 (CX-072), CD-166 PDC, PD-1, CD-71 PDC, ITGA3 PDC, T-cell Engaging Biospecifics, Cancer Immuno-therapies (in collaboration with Bristol-Myers Squibb (NYSE:BMS), PDCs (in collaboration with Pfizer, and PDCs (in collaboration with ImmunoGen).
See CytomX's pipeline here.
The Probody technology platform creates a therapeutic antibody that remains in active until it reaches the targeted tumor. Their therapies are expected to have greater efficacy and better safety profiles than other cancer treatments due to the capacity to target specific tumors while leaving surrounding health tissue untouched.
In its SEC filing, the company notes that cancer is the second leading cause of death in the U.S., accounting for close to 25 percent of all deaths annually. Current research into cancer treatments has evolved from small molecule chemotherapy agents to cancer immunotherapies that support and trigger the body's own immune system to attack tumors.
CytomX maintains strategic collaborations with Pfizer, Bristol-Myers Squibb and ImmunoGen, and the company intends to use the proceeds of the IPO to fund continued development and clinical trials of its drug candidates.
Sean McCarthy, D. Phil, joined CytomX in 2011. He has over twenty years of experience in the biotechnology industry at such companies as Millennium Pharmaceuticals, SGX Pharmaceuticals, and Pappas Ventures. He received his B.Sc. in biochemistry and pharmacology at King's College, University of London, an MBA from the Rady School of Management at UC San Diego, and a D.Phil. in cancer biology from St. John's College, University of Oxford.
CFO Robert Goeltz joined CytomX in 2015. His previous experience includes senior financial positions at Onyx Pharmaceuticals, Amgen and Tularik. Mr. Goeltz earned an MBA from the UCLA Andersen School of Management and a bachelor's degree in business from Emory University. He is also a Certified Public Accountant (inactive).
Potential Competition Is Fierce
Because cancer is so prevalent with a high percentage of fatalities, many large and smaller pharmaceutical companies are seeking to bring efficacious treatments to the market. These include AdaptImmune LLC (NASDAQ:ADAP), AstraZeneca (NYSE:AZN), GlaxoSmithKline (NYSE:GSK), Idera Pharmaceuticals (NASDAQ:IDRA), Immune Design Corp (NASDAQ:IMDZ), Merck & Co. (NYSE:MRK), NewLink Genetic Corporation (NASDAQ:NLNK), Novartis AG (NYSE:NVS), Pfizer (PFE), Roche Holding Ltd (NYSE:ROG), Sanofi SA (NYSE:SNY), ImmunoGen (IMGN), Seattle Genetics (NASDAQ:SGEN), Argos Therapeutics (NASDAQ:ARGS), Bellicum Pharmaceuticals (NASDAQ:BLCM), Biovest International, bluebird bio (NASDAQ:BLUE), Celgene Corporation (NASDAQ:CELG), Juno Therapeutics (NASDAQ:JUNO), Kite Pharma (NASDAQ:KITE), and Valeant Pharmaceuticals (NYSE:VRX).
CytomX Therapeutics provided the following figures from its financial documents for the six months ended June 30, 2015:
|
2015 |
2014 |
|
|
Revenue |
$3,785,000 |
$1,301,000 |
|
Net Income |
($12,017,000) |
($21,934,000) |
As of June 30, 2015:
|
Assets |
$134,089,000 |
|
Total Liabilities |
$70,989,000 |
|
Stockholders' Equity |
($93,021,000) |
CTMX is still pre-clinical, meaning it could be years before its viability as an investment is known. That being said, oncology biotechs often garner significant interest. With regards to a first-day trade, we've seen similar IPOs, such as Blueprint (NASDAQ:BPMC) and bluebird bio in particular do very well. Overall, 65 healthcare offerings have brought first-day returns of over 18% on average.
CTMX is the largest biotech this week; investors could be drawn to and perhaps buy in at higher rates than slightly lower profile firms, such as ACRS. Furthermore, CTMX has impressive partnerships with Pfizer, Bristol-Myers Squibb and ImmunoGen (noted above) and is backed by Third Rock Ventures, Fidelity and Pfizer. Combined, all of these credentials indicate possible excitement and early success for CTMX.
We suggest obtaining a modest allocation.
Summary
- San Francisco-based CTMX is a biopharmaceutical company focused on developing treatments for cancer.
- Impressive early partnerships with Pfizer, Bristol-Myers Squibb and ImmunoGen; and backing by noteworthy VCs.
- Therapies are still pre-clinical; long-term viability of CTMX is uncertain.
- Being the largest biotech firm to go public this week, the offering could pop on Thursday.
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