IPO Report: GenSight Biologics S.A. (GNST)

Francis Gaskins |

GenSight Biologics, GenSight Biologics IPO, GenSight Biologics IPO price, GenSight Biologics IPO date, stocks to buy now, small-cap stocks

GenSight Biologics S.A. (GNST) is a clinical-stage biotechnology company discovering and developing novel therapies for mitochondrial and neurodegenerative diseases of the eye and, in the future, of the central nervous system. The company is headquartered in Paris, France.

Two other companies are scheduled to IPO for the week of Nov 2. The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: Leerink Partners, Evercore ISI, Canaccord Genuity
Co-managers: None

End of lockup (180 days): Wednesday, May 4, 2016
End of 25-day quiet period: Tuesday, December 1, 2015

GNST scheduled a $65 million IPO with a market capitalization of $256 million at a price range midpoint of $14 for Friday, Nov. 6 2015 on Nasdaq.

GenSight Biologics S.A. (GNST) IPO Summary

GNST is a clinical-stage biotechnology company discovering and developing novel therapies for mitochondrial and neurodegenerative diseases of the eye and, in the future, of the central nervous system.

To address these therapeutic areas, GNST leverages its integrated development platform by combining a gene therapy-based approach with its core technology platforms of mitochondrial targeting sequence, or MTS, and optogenetics.

GenSight Biologics S.A. (GNST) IPO Valuation

Glossary

Accumulated deficit (mm)

.

.

-$5

     

Per share dilution

.

.

-$8.63

     
             

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

GenSight Biologics S.A. (GNST)

$256

64.1

-22.5

2.6

2.6

26%

Annualizing June 6 mos

       
             

GenSight Biologics S.A. (GNST) IPO Conclusion

Neutral

Gene therapy

Existing shareholders may purchase up to $15mm, 23% of the IPO

Small current market, 1400-1500 potential new patients each year

Price to book of 2.6

P/E of -22.5 indicating moderate cash burn relative to market cap

Phase 3 trials to start in Q4 '15, increasing cash burn rate

Phase 3 trials to be in the US & Europe

GenSight Biologics S.A. (GNST) Business

GNST is a clinical-stage biotechnology company discovering and developing novel therapies for mitochondrial and neurodegenerative diseases of the eye and, in the future, of the central nervous system.

To address these therapeutic areas, GNST leverages its integrated development platform by combining a gene therapy-based approach with its core technology platforms of mitochondrial targeting sequence, or MTS, and optogenetics.

GNST’s management and scientific teams have extensive experience in gene therapy and drug development, in particular in the field of ophthalmology, and have served in leadership roles at several innovative ophthalmology companies.

GNST’s initial focus has been on developing therapies for severe retinal diseases, with the goal of preserving or restoring vision in patients suffering from such diseases.

Revenue

GNST has never generated any revenues from product sales, which GNXT expects  will take a number of years and is subject to significant uncertainty.

GNST has incurred operating losses in each year since inception in April 2012

Since inception, GNST has received one non-refundable subsidy from Bpifrance Financement in connection with development of product candidates using the GNST optogenetics technology platform.

Of the €865,000 received in December 2014, GNST recognized €191,011 and €143,113 for the year ended December 31, 2014 and the six-month period ended June 30, 2015, respectively, in other income based on research and development expenses incurred as of December 31, 2014 and June 30, 2015, as applicable, with the balance recorded in deferred revenue in the statement of financial position.

Pipeline

GNST's pipeline currently consists of two lead product candidates for the treatment of sight-threatening retinal degenerative diseases,

together with products in preclinical development targeting ophthalmic and neurodegenerative diseases.

Gene Therapy

Using its gene-therapy based approach, GNST’s product candidates are designed to be administered in a single treatment to each eye by intravitreal, or IVT, or subretinal injection in order to provide patients with a long-lasting functional cure, potentially for the rest of their lives.

First Core Technology Platform

GNST’s first core technology platform, based on its MTS is, to its knowledge, the only existing technology that permits missing mitochondrial proteins to be shuttled into the mitochondrion, enabling the restoration of mitochondrial function. Using its proprietary MTS technology platform,

GNST is developing product candidates for the treatment of Leber hereditary optical neuropathy, or LHON, an orphan mitochondrial disease leading to irreversible and sudden sight loss in teens and young adults and for which no treatment approved by the U.S. Federal Drug Administration, or FDA, is currently available.

Lead Product Candidate

GNST’s lead product candidate, GS010, targets LHON due to a mutation in the NADH dehydrogenase 4 mitochondrial gene, or ND4. NADH dehydrogenase is an enzyme that acts on NADH, the reduced form of nicotinamide adenine dinucleotide, and is an important enzyme in cellular metabolism.

Based on data from regional studies, GNST estimates the incidence of LHON to be approximately 1,400 to 1,500 new patients who lose their sight every year in the United States and Europe.

Orphan Drug Designation

GS010 has received orphan drug designation for the treatment of LHON in the United States and the European Union.

Phase 1/2 Trial

GNST has completed a Phase I/II trial for GS010 in France in 15 patients with advanced LHON with an ND4 gene mutation and GS010 was shown to be safe and well tolerated.

Although the Phase I/II trial was designed specifically as a safety and tolerability trial and was conducted in patients with advanced disease who were not expected to recover significant vision, improvement of some electrophysiological parameters was observed, suggesting that GS010 may be active in restoring a level of functionality in ganglion cells.

FDA Cleared Investigational New Drug Application

The FDA cleared GNST’s Investigational New Drug, or IND, application, in the United States on August 19, 2015 and GNST submitted a Clinical Trial Application, or CTA, in certain individual European countries in July 2015.

Phase III Clinical Trials

GNST expects to initiate pivotal Phase III clinical trials in GS010 in the fourth quarter of 2015 at seven sites, one each in France, Germany, Italy and the United Kingdom and three in the United States.

GNST expects that the benefits of GS010 treatment will be prevention of further vision loss and/or vision restoration, leading to increased autonomy and overall quality of life.

GNST believes that, given its stage of clinical development, GS010 has the potential to be the first therapy approved by the FDA, for the treatment of LHON.

GNST has also initiated a research program to target other LHON mutations using GNST’s MTS technology platform. GNST’s GS011 product candidate is designed to treat LHON due to mutation in the NADH dehydrogenase 1 mitochondrial gene, or ND1. Given the unmet medical need and the orphan status of the disease, GNST believes that the market for LHON treatment is very attractive.

GenSight Biologics S.A. (GNST) Intellectual Property

GNST has in-licensed numerous patents and patent applications and possess significant know-how and trade secrets relating to its product candidates. GNST’s rights to intellectual property, whether in-licensed or owned, are generally directed to methods of treatment or prevention of clinical indications important for its development programs, allotopic expression, mitochondrial trafficking, optogenetics, AAV vectors, transferring genetic material into cells, processes to manufacture and purify its product candidates, optics and other proprietary technologies and processes related to its product candidates.

At least 36 patent applications that GNST in-licenses or has an option to in-license have been filed in the United States and foreign jurisdictions by or on behalf of GNST’s licensors.

To date, eight patents from these applications have been issued.

The patent application family GNST in-licenses from Avalanche relates to AAV virions with altered capsid protein 7m8 AAV.

Two applications in this family are pending in the United States, and corresponding patent applications are pending in Australia, Canada, Europe, Israel, Japan, South Korea, China, Mexico, Singapore, Russia and Hong Kong. Patents that grant from this patent family are generally expected to expire in 2032, subject to possible patent term extensions.

GenSight Biologics S.A. (GNST) Competition

GNST faces competition from pharmaceutical and biotechnology companies, as well as from academic institutions, governmental agencies and public and private research institutions.

Most gene and cell therapy products are still in the early stages of development.

Except for Glybera, the product being marketed by uniQure and Chiesi Farmaceutici SpA, no other gene therapy has been approved.

GNST is aware of several companies focused on developing gene therapies in various other indications, including bluebird bio, Inc., Applied Genetic Technologies Corporation, Asklepios BioPharmaceutical, Inc., Audentes Therapeutics, Inc., Avalanche, Dimension Therapeutics, Inc., NightstaRx Ltd, Spark Therapeutics, Inc., uniQure and Voyager Therapeutics, Inc.

GenSight Biologics S.A. (GNST) 5% Shareholders Pre-IPO

Novartis Pharma AG      20.37%

Abingworth Bioventures VI LP    17.06%

Versant             17.06%

Vitavest S.à.r.l.             7.48%

Fidelity     9.44%          

GenSight Biologics S.A. (GNST) Dividends

No dividends are planned.

GenSight Biologics S.A. (GNST) Use of Proceeds

GNST expects to receive $57 million from its IPO and use it for the following:

$50 million, to support further clinical development of GS010 for LHON with the ND4 gene mutation, and, pending the results of clinical trials, subsequent applications for marketing approval of GS010 in Europe and the United States;

 $33 million, to support further preclinical and clinical development of GS030 for RP, and, pending the results of clinical trials, subsequent applications for marketing approval of GS030 in Europe and the United States; and

 the remainder to fund internal research and development expenses associated with its other product candidates and research projects, as well as working capital, capital expenditures and other 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

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