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IPO Report: Prosensa Holding B.V.

By  +Follow June 27, 2013 11:50AM
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Based in Leiden, NL, Prosensa Holding B.V. (RNA) scheduled a $60 million IPO with a market capitalization of $408 million, at a price range mid-point of $12 for Friday, June 28, 2013.

  • F1-A filed June 18, 2013
  • Manager, Joint Managers: J.P. Morgan; Citi
  • Co-Managers: Leerink Swann; Wedbush PacGrow; KBC Securities; Trout Capital

Summary

RNA is working on a medical solution to Duchenne muscular dystrophy (DMD), a genetic disease. DMD occurs mostly in boys. Symptoms typically appear between ages 1-4 years old.

The results of clinical trials may indicate that drisapersen may lead to stabilization of the disease. But stabilization is not a molecular cure, which is what some of the recent stem cell IPOs seem to offer as a possiblity.

Another company, PTCT, focuses on a different subset of DMD and was up 10% on its IPO on Thursday, June 20, 2013.

RNA reports in Eurodollars, so to do any financial analysis in the U.S. dollars it's necessary to convert to dollars.

Collaboration

100% of revenue comes from licensing and collaboration agreements with GlaxoSmithKline (GSK), and RNA works closely with Leiden University Medical Center (LUMC)

Valuation

Post-IPO RNA will have $107 million in cash. The ratio of cash to market capitalization will be 26%, at the price point mid-point of $12. RNA's accumulated deficit is $56 million.

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing Q1 '13

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

Prosensa Holding B.V. (RNS)

$408

31.9

-22.2

5.4

5.9

15%

Glossary

Conclusion

Relative to price-to-book ratios, RNA is priced at about double PTCT, which IPO'd June 20. Although some IPO watchers believe RNA will go up on the IPO, it seems product to avoid RNA based on the comparison with PTCT.

To put the above conclusions and observations in context, the following is reorganized, edited and summarized from the full S-1 referenced earlier:

Business

RNA is a biotechnology company engaged in the discovery and development of ribonucleic acid-modulating, or RNA-modulating, therapeutics for the treatment of genetic disorders.

RNA's primary focus is on rare neuromuscular and neurodegenerative disorders with a large unmet medical need, including Duchenne muscular dystrophy, myotonic dystrophy and Huntington's disease.

RNA"s clinical portfolio of RNA-based product candidates is focused on the treatment of Duchenne muscular dystrophy, or DMD. Each of RNA's DMD compounds has been granted orphan drug status in the United States and the European Union.

About DMD

RNA is working on a medical solution to Duchenne muscular dystrophy , a genetic disease. DMD occurs mostly in boys. Symptoms typically appear between ages 1-4 years old. The main sign of DMD is muscle weakness that worsens over time. Before age five, the muscles in the legs, arms, and trunk begin to weaken. Later in the disease the heart and respiratory muscles weaken.

DMD is a progressive, serious disease and is caused by a genetic mutation. The mutation causes the gene to make inadequate amounts of a protein called dystrophin. This protein is needed to keep muscles intact.

Collaboration with GlaxoSmithKline

In 2009, RNA entered into an exclusive worldwide collaboration with GSK for the development and commercialization of RNA-based therapeutics for DMD, with GSK exclusively licensing worldwide rights to develop and commercialize drisapersen and obtaining an option to exclusively license PRO044.

In addition, GSK has the option to exclusively license either PRO045 or PRO053 and the further option to exclusively license either PRO052 or PRO055. PRO045 is paired with PRO053, and PRO052 is paired with PRO055, because each product candidate in the respective pairings addresses a similar-sized patient sub-population and is at a comparable stage of development.

RNA will retain the full rights to the product candidates that are not licensed by GSK, and for each product candidate licensed by GSK from each of the pairings of product candidates described above, RNA will retain the option to certain commercial rights in a selected European territory. All of other DMD compounds fall outside of the scope of the agreement, and RNA intends to develop and commercialize them or consider partnerships.

GSK financial terms

Upon entering into the agreement with GSK, RNA received a $23 million nonrefundable upfront payment from GSK and RNA has received $63.5 million in total under the agreement. Including amounts already paid, RNA is eligible for up to $677 million in total milestone payments under the agreement.

RNA is also entitled to receive percentage royalties in the low teens on future global sales of drisapersen and each of the other compounds that GSK licenses and successfully commercializes.

More about DMD

DMD is one of the most prevalent rare genetic diseases globally affecting up to 1 in 3,500 boys and is invariably fatal. There is currently no approved disease-modifying therapy for DMD. The progressive muscle-wasting that characterizes this disease is caused by inadequate production of dystrophin, a protein necessary for muscle function, as a result of mutations in the dystrophin gene. The different mutations, which are mostly deletions of one or more exons, found in the dystrophin gene result in distinct sub-populations of DMD patients.

RMA is designing product candidates to address several sub-populations using RNA's platform technology. The first product candidate, drisapersen, can address a variety of mutations in the dystrophin gene, such as a deletion of exon 50 or exons 48 to 50.

RNA financing

Since 2002, RNA raised $75.6 million from private placements of equity securities, including to a number of venture capital firms. In addition, RNA has received grants and loans from several DMD-focused patient advocacy organizations to support research of therapies for DMD. As of March 31, 2013, RNA had $48 million in cash and cash equivalents.

Clinical development

Drisapersen is being developed in collaboration with GlaxoSmithKline, or GSK. Drisapersen aims to restore dystrophin expression and improve muscle condition and function in the largest known sub-population of DMD patients.

In clinical trials, drisapersen has been shown to produce dystrophin expression and have a beneficial therapeutic effect on DMD patients. A Phase II placebo-controlled study of drisapersen in 53 DMD patients was completed and demonstrated a statistically significant and clinically important difference in the primary endpoint, which was the distance walked in the six minute walk test, or 6MWD, between the placebo group and the continuous active-treatment group at a dose of 6 mg/kg/week after 24 weeks.

This clinically meaningful benefit was maintained after 48 weeks of treatment, and drisapersen was well tolerated throughout the duration of this study. Preliminary results suggest that treatment with drisapersen was in general associated with increased levels of dystrophin expression when compared with pre-treatment levels.

Drisapersen successfully completed a twelve-patient Phase I/II study, and all patients were enrolled in an open-label extension study which has been ongoing since August 2009. The results indicate that drisapersen may lead to stabilization of the disease, as evidenced by an improvement or a slower than expected decline in the 6MWD, and the ongoing study continues to provide safety and tolerability data.

A pivotal Phase III study of drisapersen was initiated in December 2010, and results are expected in the fourth quarter of 2013. This study is a randomized, double-blind and placebo-controlled trial, assessing drisapersen at a dose of 6 mg/kg/week in 186 boys. The primary endpoint is the 6MWD at 48 weeks.

To date, over 300 patients have participated in clinical studies of drisapersen at more than 50 trial sites in 25 countries, and patient retention rates through March 2013 averaged 96% across all drisapersen clinical studies.

Follow-on DMD compounds

PRO044, the next most advanced product candidate, addresses a separate sub-population of DMD patients. RNA developed PRO044 using our exon-skipping technology to generate a product candidate with the same mechanism of action that is used by drisapersen.

PRO044 is currently in a Phase I/II study in Europe, which RNA expects to complete in the second half of 2013. RNA has four additional earlier-stage compounds that address other distinct sub-populations of DMD patients.

Of these, PRO045 entered clinical trials in the first quarter of 2013, and DMD anticipates that PRO053 will enter clinical trials in mid-2013. PRO052 and PRO055 are in advanced preclinical development.

RNA has started a research program, PROSPECT, which includes a new and innovative application of RNA's exon-skipping technology platform to specifically target rarer mutations in the dystrophin gene.

Intellectual property

RNA has entered into a collaboration arrangement with LUMC for the reciprocal licensing of RNA's and LUMC's individual and joint intellectual property rights in relation to certain patent rights and know-how rights, which have been the basis of RNA's research and development of treatment targeting DMD.

5% shareholders pre-IPO

ABV IV Holdings N.V., 21.4%
LSP Prosensa Pooling B.V., 21.4%
New Enterprise Associates 13, L.P., 20.8%
Gimv N.V., 9%
Idinvest Partners, 9%
MedSciences Prosensa Holding B.V., 6.9%

Use of proceeds

RNA expects to net $53 million from its IPO.

RNA currently expects that it will use the net proceeds from this offering, together with cash and cash equivalents on hand, as follows:

• $82 million to fund the current DMD development portfolio for which RNA bears expenses (PRO045, PRO053, PRO052 and PRO055), PROSPECT and DMD-support projects, including the DMD natural history study;

• $11 million to fund non-DMD projects, including DM1 and HD; and

• the remainder for working capital and other general corporate purposes.

Results for RNA
Biotech Beat
20 Apr 14 00:35:50
RT @AndyBiotech: $SRPT Barron's Andrew Bary has another piece on #eteplirsen situation this weekend http://t.co/IjjHi1axo1 H/T @adamfeuerst…
Fin_Vestor
20 Apr 14 00:24:40
$RNA Biotech Bullish Stocks: GenVec Inc. (NASDAQ:GNVC), Sorrento Therapeutics ... http://t.co/Jh19ztWwN8
Fin_Vestor
19 Apr 14 17:26:03
$RNA Sarepta: High-Profile Decision for the FDA http://t.co/ac3hhJhdrm
Cave Island Ventures
19 Apr 14 15:24:46
RT @StockSignaling: Oversold: $CERE $TEAR $RSH $QURE $CHGG $ATHX $WPCS $KBIO $GEVO $RNA $SEIC $XONE $ATOS $DSCI $LITB http://t.co/3gvJLENZt…
On Time Picks
19 Apr 14 12:38:30
bladerunner1717: re: $RNA: bladerunner1717 http://t.co/e5Hy19Xm84
Fin_Vestor
19 Apr 14 11:22:09
$RNA Biotech Bullish Stocks: GenVec Inc. (NASDAQ:GNVC), Sorrento Therapeutics ... http://t.co/Jh19ztWwN8
chartguy89
19 Apr 14 08:51:52
RNA 5.07 Stock Charts $RNA Prosensa Holding N.V. (NASDAQ) RNA Stock Chart - 1 Month http://bigcharts.marketwat http://t.co/sA8ikp1WRE
Tracy K Seckler
19 Apr 14 07:29:40
RT @AndyBiotech: $SRPT Barron's Andrew Bary has another piece on #eteplirsen situation this weekend http://t.co/IjjHi1axo1 H/T @adamfeuerst…
Must Trade Medtech
19 Apr 14 06:24:14
RT @AndyBiotech: $SRPT Barron's Andrew Bary has another piece on #eteplirsen situation this weekend http://t.co/IjjHi1axo1 H/T @adamfeuerst…
23Chromz
19 Apr 14 06:13:46
RT @AndyBiotech: $SRPT Barron's Andrew Bary has another piece on #eteplirsen situation this weekend http://t.co/IjjHi1axo1 H/T @adamfeuerst…
GavinGreenberg
19 Apr 14 03:24:04
$RNA: [$$] A High-Profile Decision for the FDA http://t.co/OQxvpBgqEE
Stock Herald
19 Apr 14 02:29:05
$RNA: [$$] A High-Profile Decision for the FDA http://t.co/RTLyLHNGPB
Fin_Vestor
19 Apr 14 02:00:37
$RNA Sarepta: High-Profile Decision for the FDA http://t.co/iAeDWlmbtp
Informer
19 Apr 14 01:18:35
$RNA: [$$] A High-Profile Decision for the FDA http://t.co/bPB7pm0wfC
Fin_Vestor
19 Apr 14 01:09:41
$RNA Sarepta: High-Profile Decision for the FDA http://t.co/yHb7qcMNcB
GavinGreenberg
19 Apr 14 00:07:07
$RNA: [$$] A High-Profile Decision for the FDA http://t.co/OQxvpBgqEE
Fin_Vestor
18 Apr 14 23:54:06
$RNA [$$] A High-Profile Decision for the FDA http://t.co/3lXVooxQUy
StockNews24
18 Apr 14 23:51:06
$RNA - [$$] A High-Profile Decision for the FDA -> http://t.co/viJcaey7uY #stock #stocks #stockaction
Fin_Vestor
18 Apr 14 23:48:10
$RNA Sarepta: High-Profile Decision for the FDA http://t.co/HJleMCUeXK
Stock Signaling
18 Apr 14 20:01:08
Oversold: $CERE $TEAR $RSH $QURE $CHGG $ATHX $WPCS $KBIO $GEVO $RNA $SEIC $XONE $ATOS $DSCI $LITB http://t.co/3gvJLENZtD #markets #analyst
Stock_Tracker
18 Apr 14 02:59:14
Prosensa Holding B.V. (RNA) 5.07 $RNA Why Investors Need to Watch Sarepta Therapeutics Inc. David Williamson a http://t.co/naQW46UDMn
Sudhanva Raj
17 Apr 14 10:17:17
$RNA - Low volume ramp
On Time Picks
16 Apr 14 21:26:12
pcrutch: Re $RNA/SRPT: pcrutch http://t.co/Rr9S8aSgBH
Stock Signaling
15 Apr 14 20:01:09
Oversold: $CHGG $ATHX $WPCS $KBIO $GEVO $RNA $SEIC $XONE $ATOS $DSCI $LITB $HMSY $AFFY $ADXS $IMPV http://t.co/3gvJLENZtD #markets #dow #spy
Ernest Partington
15 Apr 14 10:08:04
$RNA Why Investors Need to Watch Sarepta Therapeutics Inc. http://t.co/VegaPoIkqA
Peter D. Hofmann
15 Apr 14 07:17:06
$RNA: Why Investors Need to Watch Sarepta Therapeutics Inc. http://t.co/C2nvNBL7On
SNN Team
15 Apr 14 06:53:26
$RNA - Why Investors Need to Watch Sarepta Therapeutics Inc. -> http://t.co/UPUwoSDHR1 #stock #stocks #stockaction
Ernest Partington
15 Apr 14 06:50:08
$RNA Why Investors Need to Watch Sarepta Therapeutics Inc. http://t.co/VegaPoIkqA
stocktrackeralert
15 Apr 14 05:09:43
Pre Market Movers: $WAVX 1.30(28.71%) $PCBK 15.75(18.42%) $RNA 5.20(17.38%) $JOEZ 1.24(14.81%) $ZBRA 74.90(9.70%)
masterlongevity
14 Apr 14 16:54:37
RT @TomSilver39: Best IPOs Performers in the 30 days (% Return): $RARE $ASPX $DRNA $RNA $RVNC $BLUE $RGDO http://t.co/h26DJgCBBs
				
				
By  +Follow June 27, 2013 11:50AM
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