Back in 2015, billion-dollar biotechnology company Ionis Pharmaceuticals Inc. (IONS) formed a privately held subsidiary called Akcea Therapeutics. The remit of the subsidiary would be to further develop and commercialize a category of Ionis’ drugs, which were designed to treat various lipid disorders.

Fast forward a couple of years, and Akcea is preparing to hit the NASDAQ Global Market by way of an Initial Public Offering (IPO); an IPO for which the parent company, Ionis, just filed with the SEC.

The company is looking to raise $125 million through the issue of 10 million shares for between $12 and $14 each. The $125 million is based at midpoint pricing, with an optimistic target (at $14 a share) potentially reaching $150 million.

Ahead of the IPO, here is a look at what the funds will go towards and a consideration of whether this one is worth a look going forward.

As mentioned, then, the company has a remit of developing treatments for lipid disorders, which are conditions that mean a patient has high levels of either low-density lipoprotein (LDL) cholesterol, or elevated levels of a type of fats called triglycerides. In both instances (increased LDL or high level of triglycerides) patients have an elevated risk of cardiovascular disease and stroke. This is one of the largest patient populations in the US (and globally, across the developed world) and any treatment that hits markets with a favorable clinical benefit profile has the potential to be a blockbuster drug, especially if it’s a safety profile compares favorably to those drugs currently available as standard of care treatments in space.

And it’s this favorable safety profile, combined with a sort of one-drug-treats-all approach, that Ionis, through Akcea, is going after.

The company has a pipeline of four or five primary assets, but the lead, and the one that very much underpins the vast majority of its valuation right now, is called Volanesorsen. It is part of a family of drugs called antisense therapies. Antisense therapies are gene-based treatments, and can be particularly useful in treating conditions whereby a faulty gene is at the root of the underlying disease. Basically, a company synthesizes a strength of nucleic acid (be that DNA, RNA or a chemical analogue), which will bind to the messenger RNA (mRNA) produced by the faulty gene in question. This binding turns off the faulty gene and, by proxy, addresses the issue that underpins the condition.

It sounds simple, but in practice, it’s pretty difficult. The synthesis of the correct form of nucleic acid is tough to pin down, and many companies have tried and failed to bring this sort of treatment to market in the past.

So, with Volanesorsen, Akcea has identified that a faulty gene called apo-CIII results in elevated levels of lipids or triglycerides, and it has synthesized a strand of what’s called oligonucleotide to go after the mRNA for the gene in question. Once in place, the synthetic strand of oligonucleotide turns off the faulty apo-CIII, with the goal of reducing lipid levels.

It’s a pretty neat mechanism of action, and early-stage data suggest the drug is very effective in its aim.

The company is going after two primary conditions with Volanesorsen initially – one called familial chylomicronemia syndrome, or FCS, one called familial partial lipodystrophy, or FPL. Both are severe, rare, genetically defined lipid disorders characterized by extremely elevated levels of triglycerides.

Standard of care treatments for both the conditions vary, and include a cocktail of drugs (each of which brings about some pretty nasty side effects) and a variety of different dietary restrictions and methods, variable dependent upon whether the patient suffers from FCS or FPL. Akcea thinks it can treat both with the same drug, and if it can, it could quickly swallow up a large portion of the market as and when its drug hits the shelves.

So what are the chances of the company getting this one green lighted by the FDA?

Akcea has already conducted and closed out a phase 3 trial in the FCS population, with data from this study demonstrating a strong degree of clinical benefit in the target indication. A second phase 3, looking at the drug in the FPL population, is ongoing and should wrap up late 2018, early 2019.

The FCS program actually consisted two phase 3s (looking at two different levels of triglycerides, one high, one extremely high) – the first called APPROACH and the second called COMPASS. APPROACH achieved its primary endpoint of reduction in triglycerides at three months, with a 77% mean reduction in triglycerides across 66 FCS patients. COMPASS also hit on its primary endpoint of reduction in triglycerides at three months, with a 71% mean reduction in triglycerides.

Both studies (and this is important) demonstrated a marked reduction in pancreatitis attacks between active and placebo arms – something commonly associated with SOC treatment.

That looks great, what’s the downside?

While both studies demonstrated benefit, there are some concerns over the drug’s impact on platelet count. Both resulted in low blood platelet count across almost the entire spectrum of patients and some patients had to discontinue the trials based on this AE alone. With that said, however, the discontinuation was small (single digit % points) and the reduced platelet count was manageable through adjuvant therapy.

It’s these two programs that most of the raised capital (around $80 million) will designate towards – first getting an NDA with the FDA in the US for the FCS program and second getting the FPL program caught up with FCS by early to mid 2019.

So let’s get back to the initial question – is this one worth a look going forward?

In a word, yes. The safety concerns associated with the two FCS phase 3 trials are far from prohibitive to an FDA green light in this indication and, chance are, we’ll see the company start commercializing the asset late next year. The acceptance of the NDA, plus the subsequent approval (if it happens) are both major post-IPO catalysts. Beyond that, the data from the ongoing FPL study and subsequent registration application should add fuel to the fire – assuming the numbers replicate those already collected.

Disclosure: The author does not own any of the stocks discussed in this article.