initial public offerings (IPOs) trading on American exchanges

Monday, March 27, 2017

====Ionis (IONS) spinout Akcea files for $100M IPO

Ionis Pharmaceuticals’ lipid disorder subsidiary Akcea Therapeutics has filed for a $100 million IPO. The spinout has secured a $50 million stock purchase commitment from its partner Novartis, putting it on track to pull in cash to fund mid- and late-phase trials of four pipeline prospects.

Akcea is yet to set the terms of the IPO but its initial filing lists $100 million as the top end of its fundraising ambitions. In a year noted as much so far for thwarted IPOs as successful listings, that target could prove elusive for some companies. But Akcea, in keeping with many biotechs that have listed successfully since the IPO market slowed down, has already secured the support of a backer that is willing to buy a sizable slice of the offering.

If all goes to plan, Novartis will buy up $50 million worth of the IPO shares. The Swiss Big Pharma’s commitment dates back to the deal it struck with Akcea and its parent company Ionis in January. Among the components of that deal—the value of which could top out above $1 billion—was a promise by Novartis to invest $50 million in Ionis or Akcea within 18 months. Akcea is using that commitment to get book building for its IPO off to a flying start.

Lipid disorder specialist Akcea has earmarked the IPO funds for four trials. The top priority is to fund volanesorsen through to its commercial introduction in familial chylomicronemia syndrome (FCS) and familial partial lipodystrophy (FPL), two rare genetic disorders characterized by problems with how the body handles triglycerides.

Ionis posted phase 3 data in patients with hypertriglyceridemia late last year, before following up with a readout from a trial of people with FCS earlier this month. Both studies linked volanesorsen to steep declines in triglyceride levels, but ongoing concerns about the safety of the antisense drug marred investor perceptions of the most recent readout. If volanesorsen comes to market, some of the IPO haul will go toward providing platelet monitoring to mitigate the risk of adverse events.

Other tranches of the anticipated cash boost will enable Akcea to take its two Novartis-partnered assets—AKCEA-APO(a)-LRx and AKCEA-APOCIII-LRx—through phase 2 trials. Once Novartis sees data from those studies, it will decide whether to exercise its option to license the the assets. Akcea also plans to spend money on a phase 2 trial of wholly-owned dyslipidemia candidate AKCEA-ANGPTL3-LRx.

Ionis stands to profit from the success of Akcea. The first payment of $15 million will come out of the IPO funds to cover a sublicensing agreement related to the $75 million upfront fee paid by Novartis. Down the line, Akcea will split licensing fees, milestones and royalties from Novartis 50-50 with Ionis. And Ionis will also retain an as-yet-undecided stake in Akcea.

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