IPO Report: Aimmune Therapeutics (AIMT)

Francis Gaskins |

Aimmune Therapeutics (AIMT) is a clinical-stage biopharmaceutical company advancing a new therapeutic approach, including the development of proprietary product candidates, for the treatment of peanut and other food allergies. The company is based in Brisbane, CA,

Six other companies are scheduled for the week of Aug. 3. The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: BofA Merrill Lynch, Credit Suisse, Piper Jaffray
Co-managers: None

End of lockup (180 days): Tuesday, February 2, 2016
End of 25-day quiet period: Monday, August 31, 2015

AIMT scheduled a $125 million IPO with a market capitalization of $585 million at a price range midpoint of $15 for Thursday, Aug. 6, 2015 on Nasdaq.

AIMT IPO Summary

AIMT is a clinical-stage biopharmaceutical company advancing a new therapeutic approach, including the development of proprietary product candidates, for the treatment of peanut and other food allergies.

It is estimated that over 30 million people in the United States and Europe have a food allergy, with peanut allergy being the most prevalent and most commonly associated with severe outcomes and life-threatening events.

AIMT Valuation

Glossary

Accumulated deficit (mm)

.

.

-$21

     

Per share dilution

.

.

-$10.46

     
             

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

Aimmune Therapeutics (AIMT)

$585

n/a

-43.0

3.3

3.3

21%

             

AIMT Conclusion

Strong buy

Peanut & other allergies

No patents or collaborators

Priced to book 3.3

P/E of -43 indicating relatively low cash burn relative to market cap

Intends to initiate Phase 3 registration in early '16

AIMT Business

AIMT is a clinical-stage biopharmaceutical company advancing a new therapeutic approach, including the development of proprietary product candidates, for the treatment of peanut and other food allergies.

It is estimated that over 30 million people in the United States and Europe have a food allergy, with peanut allergy being the most prevalent and most commonly associated with severe outcomes and life-threatening events.

AIMT’s therapeutic approach, which AIMT refers to as Characterized Oral Desensitization Immunotherapy, or CODIT, is a system designed to desensitize patients to food allergens using rigorously characterized biologic products, defined treatment protocols and tailored support services.

In ARC001, AIMT’s recently completed Phase 2 study of its lead CODIT product candidate, AR101, all of the 23 patients who completed the AR101 treatment regimen were desensitized to a clinically meaningful level of peanut protein of at least 443 mg, a level that substantially exceeds the amount of peanut protein typically encountered in an accidental exposure, which AIMT believes to be approximately 100 mg or less.

AIMT intends to initiate a Phase 3 registration trial of AR101 in early 2016 and Phase 2 studies of other CODIT product candidates for two additional food allergies in 2016.

AR101 has been granted Fast-Track designation and Breakthrough Therapy designation by the U.S. Food and Drug Administration, or FDA, and, if AIMT’s planned Phase 3 trial is successful, AIMT intends to file a Biologics License Application with the FDA and a Marketing Authorization Application with the European Medicines Agency. AIMT has worldwide commercial rights to all of its product candidates and, if approved, intend to commercialize in the United States and Europe with its own specialty sales force.

Food allergies

Food allergies are a severe and growing health problem in the United States, Europe and throughout the developed world.

Peanut is the most common food allergy, and AIMT estimates that there are over five million people in the United States and Europe with peanut allergy, including over two million children.

The prevalence of peanut allergy in children in the United States is estimated to have increased at a constant annual growth rate of approximately 10% between 1997 and 2008, and experts believe it has continued to rise since 2008.

Food-related allergic reactions are estimated to result in approximately 200,000 emergency room visits and over 10,000 hospital admissions each year in the United States.

No approved medical therapies

There are currently no approved medical therapies to cure food allergies or prevent their effects.

Avoidance is the primary method of managing a food allergy and successfully practicing avoidance can be virtually impossible, as allergic reactions can often be triggered by trace amounts of food proteins, or allergens.

For example, of the over two million people with peanut allergy in the United States, 40% to 50% are sensitive to an exposure of 100 mg or less of peanut protein, the equivalent of less than half of a peanut kernel.

For patients exposed to allergens, treatment options are limited. Epinephrine is used as a rescue medication, but its effectiveness is dependent on several factors, such as availability, the promptness of administration and sufficient dosage to counteract the effects of the allergic reaction.

The stress of practicing avoidance and the limited availability of effective treatment options can result in a fear of a fatal accidental exposure, substantially diminishing the quality of life of patients and their families. This fear can lead to psychological traumas including fear of eating, social difficulties and severe anxiety. In addition, parents of food-allergic children often attempt to prevent accidental exposures by limiting their child’s participation in everyday activities.

Intellectual property

AIMT has filed patent applications in the United States and international patent applications pursuant to the Patent Cooperation Treaty relating to the manufacture, formulation and stability of AR101 and anticipate filing similar applications with respect to AIMT’s other product candidates.

None of AIMT’s existing patent applications have resulted in issued patents and there is no assurance that any patents will be issued from any of these applications.

Even if patents do issue, there can be no assurance that the scope of the claims contained in the patents will be broad enough to provide protection from potentially competing products. If issued, AIMT’s patents relating to AR101 are projected to expire between 2033 and 2034 without taking into account any potential patent term extensions.

AIMT’s patent applications seek protection relating to its formulations and methods of manufacture. AIMT does not own or license, and do not anticipate that AIMT will be able to obtain, a composition of matter patent over the active pharmaceutical ingredient in AR101 or for any other product candidates that are based on widely or readily available food products.

In addition to patents, AIMT relies upon unpatented trade secrets, know-how, and continuing technological innovation to develop and maintain its competitive position. AIMT protects its proprietary information, in part, using confidentiality agreements with its commercial partners, collaborators, employees and consultants and invention assignment agreements with its employees.

AIMT also has confidentiality agreements or invention assignment agreements with its commercial partners and selected consultants. Despite these measures, any of AIMT’s intellectual property and proprietary rights could be challenged, invalidated, circumvented, infringed or misappropriated, or such intellectual property and proprietary rights may not be sufficient to permit AIMT to take advantage of current market trends or otherwise to provide competitive advantages.

Competition

Currently there are no approved medical therapies for the treatment of food allergies.

AIMT is aware that DBV Technologies S.A., or DBV, is developing treatments for peanut allergy and other food allergies based on a patch technology that epicutaneously delivers food allergens to the patient with the goal of desensitizing the patient to the allergens.

DBV completed a Phase 2 study for the treatment of peanut allergy in 2014. If AR101 and/or any future product candidate of AIMT’s is approved, AIMT may face competition from DBV’s product candidates, if approved.

In addition, AIMT may face competition from allergists who decide to provide OIT and other desensitization therapies to their patients using their own formulations of food allergens and treatment protocols rather than adopting AIMT’s product candidates or AIMT may face competition from companies that develop their own OIT products or other desensitization therapy products.

In the future, AIMT may face competition from competitors seeking to use AR101 as a reference product while developing a biosimilar product candidate using the FDA’s abbreviated approval pathway for biosimilar products.

The abbreviated regulatory pathway, created pursuant to the Biologics Price Competition and Innovation Act of 2009, or BPCIA, establishes legal authority for the FDA to review and approve biosimilar biologics. To be considered a biosimilar, a product candidate must be highly similar to the reference product notwithstanding minor differences in clinically inactive components. In addition, there can be no clinically meaningful differences between the product candidate and the reference product in terms of the safety, purity, and potency of the product.

5% shareholders pre-IPO

Longitude Venture Partners II, L.P.         23.16%

Aisling Capital III, L.P.    7.14%

Foresite Capital Fund II, L.P.      12.28%

Entities affiliated with Fidelity Management & Research   8.57%

Food Allergy Research & Education, Inc.             8.37%

Explore Holdings LLC    7.56%

Bryan L. Walser, M.D.    7.17%

Sunshine Charitable Foundation             8.82%

Patrick G. Enright          23.46%

Dividends

No dividends are planned.

Use of proceeds

AIMT expects to receive $113 million from its IPO and use it for the following:

$80.0 million to $90.0 million to fund the continued clinical development of AR101, including to fund its planned Phase 3 registration trial through data readout;

$30.0 million to $35.0 million to fund the development of additional product candidates; and

the remainder, if any, 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. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AIMT Aimmune Therapeutics Inc. 22.26 0.24 1.09 864,765

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