Audentes Therapeutics, Inc. (Pending:BOLD) hopes to raise $75 million through its upcoming IPO. It is offering 5 million shares of its common stock at a price range of $14 to $16. Company insiders plan to purchase 40 percent of the shares for a total of $30 million. At the range's midpoint, Audentes would have a diluted market value of $341 million.
Based in San Francisco, California, Audentes is a biotechnology company that develops preclinical gene therapies to treat rare diseases. Underwriters for the IPO include Piper Jaffray, Cowen & Company and Bank of America Merrill Lynch, as well as Wedbush. The IPO is scheduled for July 20, 2016.
Business summary
Founded in Nov. 2012, Audentes Therapeutics, Inc. is a preclinical biotechnology development company that is focused on the research, development and commercialization of gene therapies for people who suffer from rare, single-gene defect diseases. The company has four candidate products, all of which are scheduled to apply for clinical trials authorizations, beginning the third quarter of 2016. The company anticipates having preliminary data from the clinical trials ready for release by the second half of 2017 per its SEC filings. Audentes Therapeutics owns global rights to all of its candidate products.
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Unlike traditional approaches to the treatment of rare single-defect genetic diseases, Audentes is focused on correcting the underlying genetic problems, rather than on simply replacing the defective proteins, by using adeno-associated virus, or AAV. The company concentrates on rare genetic diseases that are life-threatening and that have biologies that are well-understood.
Executive management overview
Co-founder, president and CEO Matthew R. Patterson has 20 years of experience in development and research of new treatments for rare conditions. Before founding Audentes in 2012, Patterson worked at Orbi-Med as its entrepreneur-in-residence. In this position, he was responsible for evaluating and identifying investment opportunities for orphan drugs. Before that role, Patterson served as the acting CEO and president of Amicus Therapeutics. Prior to that position, he served first as the vice president of regulatory affairs and then as the vice president of commercial planning at BioMarin Pharmaceutical Inc. He holds a Bachelor of Arts in biochemistry from Bowdoin College.
Natalie Holles, the COO and senior vice president of Audentes, has more than 15 years of commercial experience in corporate development and strategic planning. She has held a variety of different executive-level positions at a number of different biotechnology and development companies. She has a Bachelor of Arts in human biology from Stanford University and a Master of Arts in cellular, molecular and developmental biology from the University of Colorado.
Financial highlights and potential risks
The company states that its leaders have more than 100 years of combined experience in the development of innovative treatments for rare genetic disorders. It also points to the fact that it has four candidate products that are ready to begin clinical trials and that have shown great promise in preclinical research and development. The company also points to its broad network with patient advocacy groups and key leaders in the industry with helping its drive towards product commercialization.
Risks include the company's short operational history. The product candidates are also still in the preclinical development phase, and Audentes states that there are no guarantees that they will be approved for clinical trials or will receive regulatory approval. The company has not yet made profits, and its success will largely hinge on the success of the products in obtaining approvals for trials as well as successful clinical results followed by strong commercialization. Another major risk is that the U.S. Food and Drug Administration has not yet approved any gene therapies for the treatment of diseases.
Conclusion: Hold Off
Audentes Therapeutics is still in the very earliest stages as a biotechnology development company. It has not made any profits since its founding and has concentrated in the areas of research and development at this stage. While its candidate products appear to be potentially promising, it is still too early to determine the likelihood of the company's success. We recommend that investors wait to see whether any of the leading product candidates are approved for clinical trials before investing.
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