Just days after rounding up $30 million in venture cash, New York-based Intercept Pharmaceuticals is boldly gambling that investors will cough up about $75 million to buy into a late-stage orphan drug for chronic liver disease. The biotech filed for an ambitious IPO, hoping it can avoid the price cuts that most other such development-stage biotech bids have been forced to endure in recent years.
The star of Intercept's show is obeticholic acid, or OCA, which it calls a "first-in-class agonist of the farnesoid X receptor, or FXR, which we believe has broad liver-protective properties." The treatment is in Phase III for second line treatment of primary biliary cirrhosis, a condition in which toxic levels of bile acids in the liver. The developer also has a slate of mid-stage studies underway for other liver conditions.
Intercept controls all of the rights to the drug outside of China and Japan, where Dainippon Sumitomo has taken the lead after inking a $315 million pact. Intercept also has preclinical programs in the pipeline for fibrosis and Type 2 diabetes, where it's partnered with Servier.
Like most biotechs, Intercept has a long record spelled in red ink. Over the last 10 years, the company has spent $82 million on drug development. It does have on hole card to play in the IPO. Its investors say they're willing to buy into the IPO, a now standard feature of biotech IPOs in the wake of the 2008 financial crisis.
OrbiMed and Genextra took charge of the C round for Intercept, noting a big appetite for orphan drugs, now one of the hottest fields in R&D.
- here's the S-1
- read the press release