Here are this week’s upcoming technology IPOs:
S1 Biopharma
Ticker: (NASDAQ: SXB)
Expected to Trade: Week of November 10
Price Range: $12.00-$14.00
Business Description
S1 Biopharma is a clinical-stage biotech company developing a combined therapy of existing drugs for sexual dysfunction. The company’s lead candidate, Lorexys, targets female hypoactive sexual desire disorder (HSDD), a lack or absence of sexual desire causing marked distress and interpersonal difficulties.
Lorexys’s combined therapy uses two antidepressants, bupropion and trazodone, meaning it could achieve approval through the shortened 505(b)(2) NDA pathway. The drug candidate is entering phase II-b trials in 2015, with data expected by year-end.
S1 also has a drug candidate in phase II-a trials for male HSDD called Orexa. The candidate will be entering phase II-a trials in the second quarter of 2015, with phase II-b expected to initiate in 2016.
Our Take
HSDD affects over 12 million women in the United States and has no FDA-approved therapies. Male HSDD is less common but also has no approved therapies. This gives S1 the potential for full penetration of a fairly large market.
The bear case for S1, though, is that even with treatment available, many of these people may still not seek it out. According to Dr. J.A. Simon, a specialist in reproductive endocrinology and infertility:
“(HSDD) is relatively common among women and causes considerable distress as well as interpersonal difficulties. Nevertheless, many women with HSDD remain untreated because they are reluctant to discuss sexual issues with their physicians and have low expectations concerning the prospects for help.”
Data from S1’s phase II-a clinical trial indicate that Lorexys is well tolerated, but it’s too early in development to get a clear picture of efficacy. The industry’s most recent attempt at treating HSDD, Flibanserin, was denied by the FDA in 2010 due to efficacy concerns.
NeuroDerm, Ltd.
Ticker: (NASDAQ: NDRM)
Expected to Trade: Thursday, November 13
Price Range: $13.00-$16.00
Business Description
NeuroDerm is a development-stage biotech company developing candidates targeting moderate to severe Parkinson’s disease (PD) and other central nervous system (CNS) disorders. The company has been supported by grants from the Michael J. Fox Foundation for Parkinson’s Research.
The company’s lead candidate, ND0612H, targets severe Parkinson’s disease and is currently in phase II-a trials. ND0612H is a high-dose form of NeuroDerm’s proprietary liquid drug formulation of levodopa (L-Dopa) and carbidopa (C-Dopa), designed to significantly reduce motor complications in Parkinson’s disease.
NeuroDerm is also developing ND0612L, a low dose of L-Dopa/C-Dopa for less-severe cases of Parkinson’s.
Our Take
L-Dopa has long been the gold standard in Parkinson’s treatment due to its ability to pass through the blood-brain barrier. As Parkinson’s progresses, though, oral doses of L-Dopa become less effective. The body does not absorb the drug well through the gut, so severe Parkinson’s patients often require highly evasive delivery methods including intestinal surgery and deep brain stimulation.
The product candidates in NeuroDerm’s portfolio are all designed to avoid these highly evasive treatments. By turning L-Dopa into a liquid formulation, NeuroDerm has found a way to use evasive measures such as subcutaneous or transdermal administration. Pending approval, ND0612H is a blockbuster drug.
Currently, there are about 1 million people believed to have Parkinson’s, with up to 60,000 new cases diagnosed each year. Globally, estimates vary between 4 million and 10 million. The majority of cases are first diagnosed with individuals over 50.
With the aging of worldwide populations, these numbers are expected to double over the next 25 years.
Adding to the bull case for NeuroDerm, the company’s product candidates are based on patented reformulations of leading, approved drugs. This means that most of them should qualify for an accelerated, lower-risk regulatory pathway to marketing approval.
PRA Health Sciences
Ticker: (NASDAQ: PRAH)
Expected to Trade: Thursday, November 13
Price Range: $20.00-$23.00
Business Description
PRA Health Sciences is a global contract research organization (CRO), which means it provides support to the biotechnology industry in the form of outsourced research services on a contract basis.
Specifically, PRAA offers clinical development services in areas including oncology, central nervous system (CNS), inflammation, and infectious diseases.
Our Take
CROs are a particularly attractive way to play the biotech industry because they can allow you to sidestep the volatility surrounding major catalyst events such as data releases and regulatory decisions. CROs benefit from high research demand but are not adversely affected when a trial goes wrong.
Additionally, the CRO market is projected to reach $23.6 billion by the end of 2014 and is predicted to grow at a 7.9% CAGR from 2014 to 2018.
PRA is one of the more prominent players in the CRO space, with 75 offices across the globe and more than 10,000 employees worldwide. Since 2000, PRA has performed approximately 2,300 clinical trials worldwide and has worked on more than 100 marketed drugs. PRA has so far conducted pivotal or supportive trials leading to the regulatory approval of more than 45 drugs.
Not only is PRA one of the world’s leading CROs by revenue, but the company is growing at a staggering pace. In the first half of 2014, PRA posted $712.3 million on the top line compared to just $423.8 million in the same period of 2013.
The company is well diversified, too, deriving 20% of revenue from small- to mid-sized pharmaceutical companies, 26% from large biotechnology companies, and 14% from emerging biotechnology companies in the first half of 2014.
PolyPid Ltd.
Ticker: (NASDAQ: PLPD)
Expected to Trade: Friday, November 14
Price Range: $10.00-$12.00
Business Description
PolyPid is a development-stage biotech developing candidates based on a proprietary drug delivery system called PLEX (Polymer-Lipid Encapsulation MatriX).
PolyPid claims that PLEX is able to securely encapsulate many types of drugs to enable “targeted, localized drug delivery into the body over periods of time ranging from days to several months.” The basic method of action is an onion-like layering of the drug, polymers, and lipids that peel off over time.
Using thousands of these layers, PolyPid is able to optimize drug treatment regimens by building in pre-determined release rates and durations over a long period of time.
PolyPid has two lead drug candidates, BonyPid-1000 and BonyPid-500. These drugs combat bacterial infection around implanted bone substitutes (for open bone fractures) and around dental implants by coating them with an antibiotic that uses the PLEX delivery system.
Our Take
The primary bull case for PolyPid comes not from its current candidates but from the PLEX delivery platform and the company’s ability to pull in a related partnership.
PLEX offers a targeted, local drug delivery vehicle that could potentially optimize therapeutic payloads and clinical outcomes for a wide range of drugs. This is something Big Pharma would pay big money for — so long as it works.
For now, though, PolyPid has nothing on the horizon that looks promising. The company will be worth another look if rumors start to fly, but for now, we’re putting it on the backburner.
