Viamet Pharmaceuticals Might Need More Than An IPO Injection To Flourish

Viamet Pharmaceuticals Holdings LLC. (Pending: VMET) expects to raise $76.8 million in its upcoming IPO. Based in Durham, North Carolina, Viamet Pharmaceuticals is identifies and develops novel anti fungal agents through its own chemistry platform.

Viamet Pharmaceuticals will offer 5.7 million shares at an expected price range of $14 to $16.

VMET filed for the IPO on April 8, 2016.

Lead Underwriters: Goldman Sachs and Morgan Stanley

Underwriters: Guggenheim Securities and Needham & Company

Business Summary: Pharmaceutical that Identifies and Develops Antifungal Agents

(Source)

As described in its SEC filings, Viamet Pharmaceuticals identifies and develops novel antifungal agents through a "metalloenzyme chemistry platform". Its product candidates include VT-1161, an oral agent currently in Phase II clinical trials for the treatment of acute candidiasis and interdigital tinea pedis (a dermatological infection). Viamet is also developing VT-1129, an oral treatment for cryptococcal meningitis, and VT-1598 (preclinical development) as an oral and intravenous therapy for invasive fungal infections.

The company's biology and chemistry technology platform enables the identification of highly differentiated metalloenzyme inhibitors across a wide range of therapeutic applications. They call this platform MIDAS (metalloenzyme inhibitor design and synthesis). Metalloenzymes are distinct from other enzymes in that they contain a metal, such as zinc or iron, at the core. The metal has been a target for therapeutic intervention, and approximately 10 percent of all drugs currently on the market work by inhibiting metalloenzymes.

The company intends to use the proceeds of the IPO for funding further development on its lead product candidate, VT-1161 for onychomychosis and RVVC, VT-1129 for the treatment of cryptococcal meningitis, and VT-1598 for the treatment of Valley Fever. The remainder of the proceeds will be used for research, additional product development, working capital and other general corporate purposes.

Executive Management Highlights

As described in company filings, CEO, President and Director Dr. Robert Schotzinger, M.D., Ph.D. has served Viamet since 2011. His previous experience includes positions at BioStratum, Abbot Laboratories, and over 20 years of experience in preclinical and clinical drug development. Dr. Schotzinger received his B.S. in Pharmacy from the Ohio State University. He has a Ph.D. in Pharmacology and M.D. training from Case Western Reserve University, Cleveland, Ohio.

CFO Dr. Richard Katz, M.D. has served Viamet since 2012. His previous experience includes positions at Icagen, Goldman Sachs, Healthcare Group, Johnson & Johnson, and Pfizer. Dr. Katz earned a Masters in Business Administration from Harvard Business School where he graduated as a Baker Scholar. He earned his M.D. from the Stanford University School of Medicine.

Potential Competition: Johnson & Johnson, Novartis, Anacor and Others

Viamet Pharmaceuticals faces competition from a variety of pharmaceutical companies that have products to treat fungal infections. These include Johnson & Johnson (NYSE:JNJ), Novartis (NYSE:NVS), Valeant (NYSE:VRX), Anacor (Nasdaq:ANAC), Hi-Tech Pharmacal (Nasdaq:HITK), and Pfizer (NYSE:PFE).

Financial Overview: Limited Growth, Early Stage Losses

Viamet Pharmaceuticals provided the following figures from its financial documents for prior years ending December 31:

As of March 31, 2016:

Conclusion: Consider Holding Off

Risks are similar to many early stage biopharmas: need for substantial additional funding for clinical trials and being too early in product development efforts to generate much organic revenue.

Following biotech NTLA's success last week, we could see additional excitement for this Goldman-led deal. At present, we are hesitant, however, as we hear the deal has not generated huge interest.