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Biotech IPO Filing

Written By Brian Hicks

Posted August 22, 2012

Last Friday, biotech Regulus Therapeutics, the product of a joint venture led by Isis Pharmaceuticals (NASDAQ: ISIS) and Alnylam Pharmaceuticals (NASDAQ: ALNY), initiated an IPO that’s projected to be worth around $57.5 million on completion.

Regulus was formed back in 2007, and all three companies involved are in the business of developing RNA-based drugs. RNA is the molecule that carries genetic information inside living organisms. Regulus, specifically, is focused on “microRNAs,” or short segments of RNA that control the function and behavior of numerous genes.

The IPO reveals that Regulus, as of June 30 of this year, had $27 million in cash and cash equivalents and counted 56 employees on its payroll.

Since all of the company’s products are currently in development, it is dependent on revenue from its partners. Ultimately—as is often the case in biotech—whether Regulus will be a success (i.e., whether it will earn profits) depends on whether its products succeed in the marketplace.

In the first half of this year, Regulus lost $4.8 million (11.7 cents per share on its 413,000 outstanding shares). In the comparable period for 2011, it lost $4.5 million. The company expects to file applications for test runs on human beings sometime in 2014.

So far, Regulus has entered into three major drug development arrangements with prominent pharmaceutical companies. In February of 2010, North County Times reports, Regulus joined GlaxoSmithKline (NYSE: GSK) to come up with microRNA drugs to fight Hepatitis-C infections—a project that could bring in more than $150 million if it meets expectations.

Later in June that year, Regulus signed with Parisian company Sanofi (NYSE: SNY) to develop drugs for fibrosis, among other diseases. The deal is worth almost $750 million, with $25 million up-front, $10 million in equities, and research backing for a minimum of three years.

Finally, in August 2012, the company teamed up with AstraZeneca (NYSE: AZN) to develop drugs for atherosclerosis. The deal ensures that Regulus receives an initial $28 million, while AstraZeneca will be buying up $25 million of Regulus shares in a separate arrangement.

Regulus plans to list on the NASDAQ under the symbol “RGLS.”