Proteostatis Therapeutics Incorporated (Pending:PTI) expects to raise $50.0 million in its upcoming IPO. Based in Cambridge, Massachusetts, Proteostasis Therapeutics is a biopharmaceutical company that develops therapeutics to treat protein conformational diseases.
We previewed PTI on our IPO Insights Platform, which includes deals on deck and real-time alerts.
PTI will offer 3.85 million shares at an expected price range of $12 to $14. If the underwriters price the IPO at the mid-point of that range, PTI will have a market capitalization of $50.05 million.
PTI filed for the IPO on December 23, 2015.
Lead Underwriters: Leerink Partners and RBC Capital Markets
Underwriters: H.C. Wainwright & Co., and Robert W. Baird Inc.
Business Summary: Biopharmaceutical Company Developing Treatments for Protein Conformational Diseases
Proteostasis Therapeutics is a biopharmaceutical company that is developing disease-modifying treatments for cystic fibrosis, as well as therapies for diseases originating from imbalances in the proteostatis network. These diseases have defects in protein folding, clearance and trafficking, and they include neurodegenerative, genetic, and retinal degenerative diseases.
The company's lead product candidate is PTI-428, an oral treatment targeting cystic fibrosis. Proteostasis Therapeutics applied to the FDA to begin Phase 1 clinical trials in late 2015, and they expect to begin these trials in the first quarter of 2016. In January 2016, the company received Fast Track designation from the FDA for the investigation of PTI-428 for the treatment of cystic fibrosis, and it plans to see orphan drug status in the United States and the European Union. Proteostasis Therapeutics noted in its SEC filings that the market for cystic fibrosis treatments is projected to exceed $5 billion in those two markets.
Its other product candidates are in pre-clinical phase, and they include PTI-NC-733 for treating cystic fibrosis, PTI-130 for the treatment of chronic obstructive pulmonary disease (COPD), Proteasome Activators (USP14) to treat neurodegeneration, and UPR Modulators for the treatment of protein conformational diseases.
The company intends to use the proceeds of the initial public offering to fund clinical trials, expand research and development, general corporate purposes such as working capital.
The company was formerly known as Proteoguard, Inc. and changed its name to Proteostasis Therapeutics, Inc. in September 2007.
Executive Management Overview: Deep Industry Experience
President and CEO Meenu Chhabra has over 15 years of experience in the biopharmaceutical industry. Her previous experience includes positions at Allozyne, Novartis, BioXell SpA, Fresenius Kabi, Warner Lambert, and Bristol-Myers Squibb. She obtained her M.B.A. from York University and her B.Sc. from the University of Toronto.
EVP and Chief Medical Officer Po-Shun Lee is a pulmonary and critical care physician. Prior to joining Proteostasis, he served at Novartis and Vertex. He was a physician-scientist at the Brigham and Women's Hospital/Harvard Medical School. Mr. Lee completed fellowship training at the Harvard Combined Pulmonary and Critical Care Program, received his MD degree from University of Pennsylvania School of Medicine and his BA degree from Johns Hopkins University.
Potential Competition: Vertex Pharmaceuticals, Genzyme, Bayer AG and Others
A number of well established biopharmaceuticals are developing treatments for cystic fibrosis and protein conformational diseases. These include Vertex (NASDAQ:VRTX), Bayer AG, Genzyme, Parion Sciences, Pfizer (NYSE:PFE), Ampliphi Biosciences Corporation (NYSEMKT:APHB), Gilead Sciences (NASDAQ:GILD), Novartis (NYSE:NVS), Hoffmann-LaRoche, Nivalis Therapeutics (NASDAQ:NVLS), ProQR Therapeutics (NASDAQ:PRQR), Galapagos NV (NASDAQ:GLPG), Eli Lilly (NYSE:LLY), AstraZeneca (NYSE:AZN), Biogen (NASDAQ:BIIB), and AbbVie Inc. (NYSE:ABBV).
Financial Overview: Early Stage Leads To Net Losses
Proteostasis Therapeutics Incorporated provided the following figures from its financial documents for the nine months ended September 30:
|
2015 |
2014 |
|
|
Net Sales |
$3,078,000 |
$3,834,000 |
|
Net Income |
($19,409,000) |
($10,932,000) |
As of September 30, 2016:
|
Total Assets |
$25,362,000 |
|
Total Liabilities |
$15,874,000 |
|
Stockholder's Equity |
($103,521,000) |
Conclusion: Consider Holding Off
We like the focus on orphan disease CF, with large market potential. PTI could be boosted by the first-day successes of healthcare deals BGNE and EDIT last week.
At the same time, PTI's syndicate is not as illustrious as that of biotech AVXSthis week. Additional risks include dependence on lead candidate PTI-428, brief operating history, losses incurred since inception.
We suggest investors consider holding off.
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