IPO Report: GlycoMimetics (GLYC)

Francis Gaskins |

GlycoMimetics (GLYC) is a clinical stage biotechnology company focused on the discovery and development of novel glycomimetic drugs to address unmet medical needs resulting from diseases in which carbohydrate biology plays a key role.

12 other IPOs scheduled for this week.  The full IPO calendar can be found at IPOpremium.

GLYCscheduled a $60 million IPO on Nasdaq with a market capitalization of $218 million at a price range midpoint of $15 for Friday, November 8, 2013.

The S-1 filed with price ranges October. 28, 2013.  The Manager, Joint Managers are Jefferies and Barclays.  The Co-Managers are Stifel, Canaccord Genuity.

Overview

GLYC has a collaboration with Pfizer, see below.  GLYC expects Pfizer to initiate a Phase 3 trial in mid-2014, and then to pursue regulatory approval of GMI-1070, the lead drug candidate.

GMI-1070 has received fast track designation from the U.S. Food and Drug Administration, as well as orphan drug designation from the FDA in the United States and from the European Medicines Agency in the European Union

Valuation

annualizing June 6 mos

Cap (mm)

Sls

Erngs

BkVlue

TanBV

in IPO

GlycoMimetics (GLYC)

$218

27.9

-36.3

3.5

3.4

28%

 

 

 

 

 

 

 

 

Conclusion

Buy GLYC on the IPO because

  • of the collaboration progress with Pfizer,
  • the lead product already has obtained orphan drug status, and
  • the price-to-book value is 3.5.

Business

GLYC is a clinical stage biotechnology company focused on the discovery and development of novel glycomimetic drugs to address unmet medical needs resulting from diseases in which carbohydrate biology plays a key role.

Glycomimetics are molecules that mimic the structure of carbohydrates involved in important biological processes. Using its expertise in carbohydrate chemistry and knowledge of carbohydrate biology, GLYC is developing a pipeline of proprietary glycomimetics that inhibit disease-related functions of carbohydrates, such as the roles they play in inflammation, cancer and infection. GLYC believes this represents an innovative approach to drug discovery to treat a wide range of diseases.

GLYC is focusing its initial efforts on drug candidates for rare diseases that it believes will qualify for orphan drug designation. GLYC is developing our lead drug candidate, GMI-1070, also known as rivipansel sodium, for the treatment of vaso-occlusive crisis, or VOC, one of the most severe complications of sickle cell disease.

VOC is typically characterized by excruciating, debilitating pain that occurs periodically throughout the life of a person with sickle cell disease. According to the U.S. Centers for Disease Control and Prevention, there were approximately 73,000 hospitalizations related to VOC in the United States in 2010.

The standard of care in the United States for people experiencing VOC is to manage its symptoms, which typically includes hospitalization, narcotic pain management and hydration. There are no approved therapies that interrupt VOC once it has started or that treat the underlying cause of the pain.

Strategy

Expects Pfizer to initiate a Phase 3 trial in mid-2014, and then to pursue regulatory approval of GMI-1070. GLYC expects to use any milestone and royalty payments that it may receive from Pfizer to accelerate the development of other drug candidates.

GLYC plans to file an IND with the FDA for GMI-1271 the first quarter of 2014.  Assuming the IND is accepted, GLYC plans to initiate a Phase 1 dose-escalation clinical trial in healthy volunteers in the second quarter of 2014, to be followed by Phase 1/2 dose-escalation clinical trials in defined populations of patients with AML.

Phase 2 clinical trial

In April 2013, GLYC completed a Phase 2 clinical trial in which 76 patients hospitalized for VOC were treated with the standard of care plus either GMI-1070 or placebo. In this trial, patients treated with GMI-1070 experienced reductions in time to reach resolution of VOC, length of hospital stay and use of opioid analgesics for pain management, in each case as compared to patients receiving placebo.

GMI-1070 has received fast track designation from the U.S. Food and Drug Administration, or FDA, as well as orphan drug designation from the FDA in the United States and from the European Medicines Agency in the European Union. GLYC believes that GMI-1070, if approved, would be the first drug to interrupt the underlying cause of VOC, thereby potentially reducing the use of narcotics for pain management and enabling patients to leave the hospital more quickly.

Collaboration

In October 2011, GLYC entered into a collaboration with Pfizer Inc., under which Pfizer is now responsible for the further clinical development, regulatory approval and potential commercialization of GMI-1070 for all indications and Pfizer has commercial rights to GMI-1070 worldwide.

Under this collaboration, GLYC received an upfront payment of $22.5 million from Pfizer. GLYC is also eligible to receive up to $115.0 million in development milestone payments, up to $70.0 million in regulatory milestone payments and up to $135.0 million in commercial milestone payments.

GLYC is also eligible to receive tiered royalties, with percentages ranging from the low double digits to the low teens, based on net sales of GMI-1070 worldwide.

Intellectual property

GMI-1070

BLYC owns six issued U.S. patents that are expected to expire between 2023 and 2029 and that cover the compound GMI-1070,

GMI-1271

The GMI-1271 patent portfolio consists of one pending Patent Cooperation Treaty, or PCT, application and four pending U.S. provisional applications that are wholly owned by GLYC.

Other Drug Candidates

In addition, GLCY has patent portfolios that are directed to, among other things, compounds that simultaneously inhibit both E-selectin and CXCR4 and compounds that target pseudomonas virulence factors. These patent portfolios are wholly owned by GLYC and include five issued U.S. patents that are expected to expire between 2027 and 2031

Competition

With respect to GMI-1070, GLYC is not aware of any therapies that have been approved for the treatment of patients experiencing an ongoing VOC episode.  GLCY is aware of a company, Mast Therapeutics, Inc., that is developing a drug to treat VOC once the crisis is underway. Mast has announced that it is currently conducting a Phase 3 clinical trial in pediatric patients 8 to 17 years old experiencing VOC.

With respect to GMI-1271 and its development for the treatment of AML and other hematologic cancers, there is substantial potential competition from other therapies currently in development. While some chemotherapies in development for AML could potentially be complementary to GMI-1271, there are also therapies in development that could be directly competitive with GMI-1271.

For example, Mozobil, which is currently marketed by Sanofi, is being studied in combination with chemotherapy for the treatment of AML. As the treatment landscape for AML changes, there is substantial risk that GMI-1271 might not provide additional benefit over other therapies.

Funding

Since inception and through June 30, 2013, GLYC raised an aggregate of $86.6 million to fund  operations, of which $22.5 million was an upfront payment under a collaboration with Pfizer and $64.1 million was from the sale of convertible promissory notes and convertible preferred stock.

Pre-IPO 5% stockholders

Entities affiliated with New Enterprise Associates, Inc., 73%
Genzyme Corporation, 11.3%

Use of proceeds

GLYC expects to net $53.3 million from its IPO.  Proceeds are allocated as follows:

$35.0 million to conduct planned Phase 1 and Phase 1/2 clinical trials of GMI-1271

$15.0 million to fund the research and development of preclinical pipeline, including drug discovery; and the remainder for working capital 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

Companies

Symbol Name Price Change % Volume
GLYC GlycoMimetics Inc. 6.25 0.02 0.32 39,139
EMPO Empowered Products Inc 0.01 0.00 0.00 1,568

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