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IPO Report: Five Prime Therapeutics (FPRX)

By  +Follow September 17, 2013 12:54PM
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Five Prime Therapeutics ($FPRX) is a clinical-stage biotechnology company focused on discovering and developing novel protein therapeutics. Only one of its product candidates is in clinical development. The others are in pre-clinical development.

Nine IPOs are scheduled for this week, 11 for next week. The full IPO calendar can be found at IPOpremium.

FPRX is based in South San Francisco, CA, and scheduled a $52 million IPO with a market capitalization of $198 million at a price range mid-point of $13, for Wednesday, September 18, 2013.

The S-1 was filed September 5, 2013

Manager, Joint Managers: Jefferies; BMO Capital; Wells Fargo Securities.  Co-Managers: Guggenheim Securities

Summary

In the past several years FPRX has used its proprietary platform to identify dozens of targets validated in rodent models and to build a growing pipeline of drug candidates

This platform has allowed FPRX to develop a pipeline of novel product candidates for cancer and inflammatory diseases and to generate over $220 million under collaboration arrangements.

(However, as one skeptical doctor said, "You can do almost anything with mice.")

FPRX is 80% owned by VC firms & strategic partners, pre-IPO

Valuation

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing June 6 mos '13

Cap (mm)

Sls

Erngs

BkVlue

TanBV

in IPO

Five Prime Therapeutics

$198

15.2

-7.1

3.7

3.7

26%

             

SCORECARD

 

Mgt

Market

Market Do-

Proprie-

Total

1-5, 5 is high

   

Grwth

mination

tary

rating

20 is perfect

 

2

2

1

2

C, 7

Accumulated deficit of -$137 million.

Glossary

Conclusion

The rating is buy FPRX, because it has a proven development platform, with one product candidate is in Phase 1 clinical trials. The price-to-book value of 3.7 appears reasonable to low in the current IPO stock market for stocks in FPRX's sector.

Note: Existing stockholders, including affiliates of directors, have indicated a non-binding interest in purchasing up to an aggregate of approximately $10.0 million of shares of common stock in this offering at the initial offering price.

Business

FPRX is a clinical-stage biotechnology company focused on discovering and developing novel protein therapeutics. Protein therapeutics are antibodies or drugs developed from extracellular proteins or protein fragments that block disease processes, including cancer and inflammatory diseases.

FPRX has developed a library of more than 5,600 human extracellular proteins, which FPRX believes represent substantially all of the body's medically important targets for protein therapeutics.

FPRX screens this comprehensive library with proprietary high-throughput protein screening technologies to identify new targets for protein therapeutics.

This platform has allowed FPRX to develop a pipeline of novel product candidates for cancer and inflammatory diseases and to generate over $220 million under collaboration arrangements.

In the past several years FPRX has used this platform to identify dozens of targets validated in rodent models and to build a growing pipeline of drug candidates. FPRX has attracted numerous partnerships with leading biopharmaceutical companies, which have generated over $220 million in funding for our business since 2006.

In addition to the FP-1039 license and collaboration agreement, under which FPRX is eligible to receive up to $435 million in contingent payments, FPRX has ongoing discovery collaborations with GlaxoSmithKline ($124 billion market cap) and UCB Pharma, S.A., or UCB.

FPRX is eligible to receive potential option exercise fees and contingent payments up to $124.3 million per target under the GSK muscle diseases collaboration, $193.8 million per target under the GSK respiratory diseases collaboration and $92.2 million per target under the UCB fibrosis and CNS collaboration. FPRX believes its platform will continue to provide funding opportunities through product and discovery collaborations.

Management

FPRX's executive management team has extensive experience in leading the discovery and development of innovative protein therapeutics and significant expertise in operational and business development functions.

The founder, President and Chief Executive Officer, Lewis T. "Rusty" Williams is a member of the National Academy of Sciences and was a co-founder and a member of the board of directors of COR Therapeutics, Inc., which was sold to Millennium Pharmaceuticals, Inc. for approximately $2.0 billion, and the Chief Scientific Officer and a member of the board of directors of Chiron Corporation.

The Senior Vice President and Chief Medical Officer, Julie Hambleton, led clinical development programs across all phases, including regulatory approvals, at Genentech, Inc. and Clovis Oncology, Inc.

The Senior Vice President and Chief Business Officer, Aron M. Knickerbocker, led oncology business development at Genentech, Inc.

Senior Vice President and Chief Scientific Officer, W. Michael Kavanaugh, led protein therapeutic programs at Novartis Institutes for Biomedical Research and Chiron Corporation.

Product candidates

FPRX's lead candidates are still in preclinical or early clinical development.

FPRX's most advanced product candidates are as follows:

FP-1039/GSK3052230, or FP-1039, is a protein therapeutic that "traps" and neutralizes cancer-promoting fibroblast growth factors, or FGFs, involved in cancer cell proliferation and new blood vessel formation.

FPRX has completed a Phase 1 clinical trial, and its partner, GlaxoSmithKline (GSK), commenced a multi-arm Phase 1b clinical trial in July 2013 in patients with abnormally high levels of FGFR1. FPRX expects preliminary data from this trial in the second half of 2014. GSK is responsible for the development and commercialization of FP-1039 in the United States, the European Union and Canada. Under an agreement, FPRX received a $50 million license fee and ise eligible to receive up to $435 million in contingent payments. FPRX has an option to co-promote FP-1039 in the United States.

License Agreements

License Agreement with Galaxy

In December 2011, FPRX entered into a license agreement with Galaxy Biotech LLC, pursuant to which Galaxy granted to us an exclusive worldwide license to develop and commercialize FGFR2b antibodies, including FPA144. Under the license agreement, FPRX is obligated to use commercially reasonable efforts to develop and commercialize at least one licensed product in at least one tumor indication. FPRX paid Galaxy an upfront license fee of $3.0 million in connection with entering into the license agreement, which was paid in two equal installments in January 2012 and July 2012.

FPRX is obligated to pay Galaxy milestone payments of up to $92.5 million comprising aggregate preclinical and intellectual property-related milestone payments of up to $3.0 million, development-related milestone payments of up to $18.0 million for development in two indications, aggregate regulatory-related milestone payments of up to $41.5 million for two indications and aggregate commercial-related milestone payments of up to $30.0 million. FPRX is also obligated to pay tiered royalties on net sales of FPA144 from the high-single digits to the low-double digits

License Agreement with The Regents of the University of California

In September 2006, FPRX entered into a license agreement with The Regents of the University of California, or the UC Regents, pursuant to which the UC Regents granted to FPRX an exclusive license under certain patents to develop and commercialize products, including FP-1039, and practice certain methods covered by the patents. Under the license agreement, FPRX is obligated to use commercially reasonable efforts to develop and commercialize at least one licensed product.

FPRX is obligated to pay the UC Regents milestone payments of up to $0.8 million for the development and marketing approval of FP-1039 in cancer. FPRX is also obligated to pay the UC Regents a low single-digit royalty on net sales of FP-1039 for the life of the relevant licensed patents

Non-exclusive License with BioWa-Lonza

In February 2012, FPRX entered into a license agreement with BioWa, Inc. and Lonza Sales AG, or BioWa-Lonza, pursuant to which BioWa-Lonza granted us a non-exclusive license to use their Potelligent® CHOK1SV technology, including the CHOK1SV cell line, and a non-exclusive license to related know-how and patents. This license is necessary to produce FPRX's FPA144 antibody.

FPRX is obligated to pay BioWa-Lonza aggregate milestone payments of up to $25.7 million for development, regulatory and commercialization milestones achieved in the FPA144 antibody program. FPRX is also obligated to pay BioWa-Lonza tiered royalties on net sales of FPA144 up to mid-single digit percentages of the proceeds of such sales.

Patent Portfolio

FP-1039

The patent portfolio for FP-1039 includes patents and patent applications wholly owned by FPRX, as well as patents exclusively licensed from UC Regents.

The FP-1039 patent portfolio also includes issued U.S. and foreign patents FPRX exclusively licenses from the UC Regents that cover composition of matter and methods of producing FP-1039. These exclusively licensed patents include issued U.S. patents covering composition of matter and methods of producing FP-1039 that expire between 2019 and 2020 and an issued patent in Korea covering composition of matter and methods of producing FP-1039 that expires in 2014.

FPA008

The FPA008 patent portfolio is wholly owned by us and includes an issued U.S. patent as well as pending U.S. and foreign patent applications covering compositions of matter, methods of use and biomarkers relating to FPA008. The issued U.S. composition of matter patent expires in 2031. Patents that may issue from these pending U.S. and foreign applications would expire between 2031 and 2033.

FPA144

The patent portfolio for FPA144 includes patents and patent applications FPRX exclusively licensed from Galaxy, as well as a pending U.S. patent application wholly owned by us. The patent portfolio FPRX exclusively licensed from Galaxy includes an issued U.S. patent as well as pending U.S. and foreign patent applications covering compositions of matter and methods of use of FPA144. The issued U.S. composition of matter patent expires in 2029. Patents that may issue from these pending U.S. and foreign applications would expire in 2029. Patents that may issue from the pending U.S. patent application wholly owned by us would expire in 2034.

Competition

If FP-1039, the lead product candidate, were approved for the treatment of squamous non-small cell lung cancer, it could face competition from currently approved and marketed products, including carboplatin, cisplatin, paclitaxel, docetaxel, gemcitabine and Tarceva® (erlotinib). Further competition could arise from products currently in development, including several small molecules that act in the same pathway as FP-1039, including Novartis AG's BGJ-398, AstraZeneca plc's AZD-4547, Eli Lilly and Company's LY-2874455, ArQule Inc.'s ARQ-087, Les Laboratoires Servier/EOS S.p.A.'s E-3810 and Janssen Pharmaceuticals, Inc.'s JNJ-42756493. Some of these programs have been advanced further in clinical development than FP-1039 and could receive approval before FP-1039 is approved, if it is approved at all.

If FPA008 were approved for the treatment of rheumatoid arthritis, it could face competition from currently approved and marketed products, including Humira®, Remicade® (infliximab) and Enbrel® (etanercept). Further competition could arise from products currently in development, including Daiichi Sankyo Co., Ltd./Plexxikon Inc.'s PLX5622 product, which acts in the same pathway as FPA008.

If FPA144 were approved for the treatment of gastric cancer, it could face competition from currently approved and marketed products, including 5-fluorouracil, capecitabine, doxorubicin, cisplatin and docetaxel, all of which are available as generics. Further competition could arise from products currently in development, including AstraZeneca plc's AZD-4547.

5% stockholders pre-IPO

80% owned by VC firms & strategic partners, pre-IPO
Advanced Technology Ventures, 9%
Domain Associates, LLC, 9%
Entities affiliated with GlaxoSmithKline, 6.3%
Entities affiliated with HealthCap, 9%
Johnson and Johnson Development Corporation, 5.2%
Kleiner Perkins Caufield & Byers, 9%
Pfizer International LLC, 13.7%
Texas Pacific Group, 9%
Versant Ventures, 9%

Use of Proceeds

FPRX expects to net $46 million from its IPO.

Proceeds are allocated as follows:

$10.0 million to fund a Phase 1 clinical trial of FPA008;
$20.0 million to fund a Phase 1 clinical trial of FPA144; and
the remainder for working capital and general corporate purposes.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for fprx
Bob Rosenstock
16 Sep 14 05:57:25
RT @MTSLNews: $FPRX $GSK exercises license for novel muscle disease target
BioInvest
16 Sep 14 04:55:25
$FPRX $GSK exercises license for novel muscle disease target
Iggy_Hex
16 Sep 14 04:36:13
RT @BayAreaBiotechI: $FPRX Very interesting here, partnerships, diversified pipe, cash for ~2 years, 1.8x mc/cash, platform, biomarkers, pl…
il falso guaritore
16 Sep 14 03:06:13
RT @bradloncar: $FPRX Announces Option Exercise by $GSK for a Commercial License to a Novel Muscle Disease Target http://t.co/hqNBbes8g7 via
Stockaholics
16 Sep 14 00:59:56
$AZFL Gained 68.2% In Just 3 Days, After Our Penny Stock Alert! Huge Update: http://t.co/f6EXGyxEe9 $HTGC $FPRX $SFUN
MAISA
15 Sep 14 21:02:25
$FPRX_target Five Prime discovered using its proprietary library of human extracellular proteins&target screening and discovery capabilities
MAISA
15 Sep 14 21:01:51
$FPRX_$11.51_GSK has exercised option to obtain exclusive,worldwide license to products containing or directed to undisclosed muscle disease
BayAreaBiotechI
15 Sep 14 20:44:21
$FPRX Very interesting here, partnerships, diversified pipe, cash for ~2 years, 1.8x mc/cash, platform, biomarkers, planing on a starter
Stockaholics
15 Sep 14 18:40:05
Our SECRET Alert on $INOH Closed Up 60% For Platinum Members Today! Major News: https://t.co/HzD6J3YtmW $HTGC $FPRX $SFUN
Wesley Harr
15 Sep 14 15:25:39
RT @Briefingcom: $FPRX: Five Prime Therapeutics announces option exercise by GlaxoSmithKline (GSK) for a commercial license to a... http://…
Kevbeau68
15 Sep 14 15:24:54
RT @Briefingcom: $FPRX: Five Prime Therapeutics announces option exercise by GlaxoSmithKline (GSK) for a commercial license to a... http://…
Briefing.com
15 Sep 14 15:24:29
$FPRX: Five Prime Therapeutics announces option exercise by GlaxoSmithKline (GSK) for a commercial license to a... http://t.co/isokLAAk8Q
Stockaholics
15 Sep 14 15:20:57
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Curtis
15 Sep 14 14:24:09
@bradloncar Takes a certain amount of trust in $GSK to do their dd and extract value from $FPRX protein. Early but lots of irons in the fire
Ronald J. Perez, PhD
15 Sep 14 14:10:41
RT @bradloncar: $FPRX Announces Option Exercise by $GSK for a Commercial License to a Novel Muscle Disease Target http://t.co/hqNBbes8g7 via
Iggy_Hex
15 Sep 14 13:42:30
RT @bradloncar: $FPRX Announces Option Exercise by $GSK for a Commercial License to a Novel Muscle Disease Target http://t.co/hqNBbes8g7 via
BosBiotech
15 Sep 14 13:24:56
RT @bradloncar: $FPRX Announces Option Exercise by $GSK for a Commercial License to a Novel Muscle Disease Target http://t.co/hqNBbes8g7 via
4-traders.com
15 Sep 14 13:10:08
Five Prime Therapeutics : Announces Option Exercise by GlaxoSmithKline for a Commercial License to a Novel ... http://t.co/RyASV8NIl1 $FPRX
V.S. Schulz
15 Sep 14 13:08:47
RT @bradloncar: $FPRX Announces Option Exercise by $GSK for a Commercial License to a Novel Muscle Disease Target http://t.co/hqNBbes8g7 via
Brad Loncar
15 Sep 14 13:08:30
One frustrating thing about following $FPRX is that all their deals are undisclosed. Hard to get excited without knowing what these are.
nixon786
15 Sep 14 13:07:38
RT @MaisaCorp: $FPRX Announces Option Exercise by GlaxoSmithKline for a Commercial License to a Novel Muscle Disease Target
DCam
15 Sep 14 13:07:17
@dcamtrades $FPRX entitled to receive up to $122.5 million in preclinical, dev't and commercial-related milestone payments. Dude I'm hot.NOT
Brad Loncar
15 Sep 14 13:06:46
$FPRX Announces Option Exercise by $GSK for a Commercial License to a Novel Muscle Disease Target http://t.co/hqNBbes8g7 via
MAISA
15 Sep 14 13:06:09
$FPRX royalties in the low- to mid-single-digit range on net sales of products related to the target.
MAISA
15 Sep 14 13:05:58
$FPRX entitled to receive up to $122.5 million in preclinical, development and commercial-related milestone payments
MAISA
15 Sep 14 13:05:44
$FPRX will receive a payment of $1.5 million in connection with the option exercise
MAISA
15 Sep 14 13:05:24
$FPRX Announces Option Exercise by GlaxoSmithKline for a Commercial License to a Novel Muscle Disease Target
Stockaholics
15 Sep 14 11:49:21
$DKAM Shot Up 150% And Has Seen Over 400 MILLION Volume Today! Huge News: http://t.co/PmkoXscmSi $HTGC $FPRX $SFUN
DCam
15 Sep 14 11:28:09
@dcamtrades Tired of this POS, Exited my last 1/3 $FPRX at $11.50, -9%. #SASTL syndrome, will look to re-add around $10.50 if reaches there
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15 Sep 14 08:51:01
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14 Sep 14 01:04:27
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13 Sep 14 18:24:12
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12 Sep 14 12:25:17
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iHangout
12 Sep 14 04:43:30
http://t.co/l4qmOlz0qf Rosner: Stock Info: FPRX Five Prime Therapeutics, Inc. $FPRX Company http://t.co/HtW6S8gKch
Rosner Stocks
12 Sep 14 04:41:05
Rosner: FPRX Five Prime Therapeutics, Inc. $FPRX Company http://t.co/YIErUXE3OQ
Rosner Stocks
12 Sep 14 04:36:57
FPRX Five Prime Therapeutics, Inc. $FPRX Company Overview Stock Message Board Recent Posts http://investorshan http://t.co/ZExoFKZ87k
Investors Hangout
12 Sep 14 03:55:22
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Investors Hangout
12 Sep 14 03:55:07
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iHangout
12 Sep 14 03:41:35
http://t.co/l4qmOlz0qf chartguy89: Stock Charts: FPRX 12.28 Stock Charts $FPRX Five Prime http://t.co/hB63envNoN
chartguy89
12 Sep 14 03:36:34
FPRX 12.28 Stock Charts $FPRX Five Prime Therapeutics Inc. (NASDAQ) Last Updated: 09/12/2014 05:36:44 FPRX Sto http://t.co/mIRqCxRKcL
iHangout
12 Sep 14 03:32:26
http://t.co/Vv1sYDyeQn Stock_Tracker: Stock DD Board: Five Prime Therapeutics Inc (FPRX) 12.28 $FPRX http://t.co/GcZrNMa2p8
Stock_Tracker
12 Sep 14 03:29:33
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12 Sep 14 02:05:06
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11 Sep 14 15:08:30
$VOIS Gained As Much As 64.71% Today! Huge News: http://t.co/GNemSzHkIS $HTGC $FPRX $SFUN
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11 Sep 14 11:48:11
$ITNS Gained 168.2% in 5 weeks! Major News: http://t.co/B2Dvcg98oO $HTGC $FPRX $SFUN
DCam
11 Sep 14 09:04:13
@dcamtrades Exited another 1/3 $FPRX this a.m. plus a few dimes. Slow trader. Will rip eventually though. Catalysts 1Q'15
Stockaholics
11 Sep 14 02:14:18
$AZFL Closed up 158.82% Yesterday! Huge Update: http://t.co/lLtAktojHc $HTGC $FPRX $SFUN
				
				
By  +Follow September 17, 2013 12:54PM
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