Based in Newtown, PA, Onconova Therapeutics (ONTX) scheduled a $60 million IPO with a market capitalization of $261 million at a price range mid-point of $13, for Thursday, July 25, 2013.
Ten other IPOs were scheduled for the week of July 15. The full IPO calendar can be found at IPOpremium.
S-1 filed July 11, 2013
Manager, Joint Managers: Citigroup; Leerink Swann
Co Managers: Piper Jaffray; Janney Montgomery Scott
ONTX is a clinical-stage biopharmaceutical company focused on discovering and developing novel small molecule drug candidates to treat cancer
Phase 2 and 3 clinical trials, Baxter Healthcare is not only a collaborator, it is interested in buying stock on the IPO.
Accumulated deficit: $183 million
3.2 times book is a good value given positive Phase 2 & # trials, and given Baxter’s interest in ONTX.
Indication of interest
Baxter Healthcare SA; ONTX’s chairman of the board of directors; and/or certain other of ONTX’s existing stockholders, including certain directors, have indicated an interest in purchasing up to an aggregate of $26.0 million of shares of common stock in the IPO.
Buy ONTX on the IPO.
ONTX is a clinical-stage biopharmaceutical company focused on discovering and developing novel small molecule drug candidates to treat cancer.
Using a proprietary chemistry platform, we have created an extensive library of targeted anti-cancer agents designed to work against specific cellular pathways that are important to cancer cells.
ONTX believes that the drug candidates in its pipeline have the potential to be efficacious in a wide variety of cancers without causing harm to normal cells. ONTX has three clinical-stage product candidates and six preclinical programs.
Development and licensing agreement
To accelerate and broaden the development of rigosertib, ONTX entered into a development and licensing agreement with Baxter in 2012 to commercialize rigosertib in Europe. In 2011, ONTX entered into a licensing agreement with SymBio to commercialize rigosertib in Japan and Korea. ONTX has retained development and commercialization rights to rigosertib in the rest of the world.
Baxter also owns 14.75 of ONTX pre-IPO.
Most advanced product candidate
Rigosertib, the most advanced product candidate, is being tested in a number of ongoing Phase 2 and Phase 3 clinical trials.
ONTX is conducting a pivotal Phase 3 trial of rigosertib under a Special Protocol Assessment, or SPA, from the U.S. Food and Drug Administration, or FDA, for higher risk myelodysplastic syndromes, or MDS. ONTX expects to report top-line overall survival results from this trial in the fourth quarter of 2013 or the first quarter of 2014.
ONTX is also evaluating rigosertib in a Phase 3 trial for metastatic pancreatic cancer, in two Phase 2 trials for transfusion-dependent lower risk MDS, and in a Phase 2 trial for head and neck cancers.
ONTX has tested rigosertib in more than 850 patients with solid tumors and hematological diseases. Rigosertib has been granted orphan drug status for MDS in both the United States and Europe as well as orphan drug status for pancreatic cancer in the United States.
Baxter Healthcare SA, or Baxter, a subsidiary of Baxter International Inc., has commercialization rights for rigosertib in Europe and SymBio Pharmaceuticals Limited, or SymBio, has commercialization rights in Japan and Korea.
ONTX has retained development and commercialization rights to rigosertib in the rest of the world, including in the United States.
Rigosertib is an inhibitor of two important cellular signaling pathways: phosphoinositide 3-kinase, or PI3K, and polo-like kinase, or PLK, both of which are frequently over-active in cancer cells. PI3K signaling promotes the growth and survival of cells under stressful conditions, such as under low oxygen levels that are often found in tumors. By inhibiting the PI3K pathway in cancer cells, rigosertib promotes tumor cell apoptosis, or programmed cell death.
The PLK pathway has a critical role in maintaining proper chromosome organization and sorting during cell division. By modulating the PLK pathway, rigosertib stops cancer cells at late stages of the cell division cycle, which leads to chromosome disorganization and death in these cells. In normal cells, rigosertib pauses progression of the cell cycle in the early stages, without causing harm or death to these cells.
Due to this dual effect of inhibiting both the PI3K and PLK pathways, and thereby effecting both tumor cell survival and division, ONTX believes that rigosertib has potential to treat a variety of cancer types, including hematological diseases and solid tumors.
Rigosertib IV in higher risk MDS:
ONTX is evaluating rigosertib IV in a multi-center, pivotal Phase 3 trial under an SPA from the FDA in patients with higher risk MDS who failed hypomethylating agent therapy.
To ONTX’s knowledge, there are no other current Phase 3 trials in this patient population. If ONTX achieves positive results in this trial, ONTX intends to submit a New Drug Application, or NDA, to the FDA in the second half of 2014, and a Marketing Authorization Application, or MAA, to the European Medicines Agency, or the EMA, by the fourth quarter of 2014 or the first quarter of 2015 for marketing approval of rigosertib IV.
ONTX’s intellectual property portfolio includes more than 100 issued patents and over 90 patent applications, either owned by ONTX or licensed exclusively to ONTX, including patents covering the most advanced product candidate, rigosertib.
These patents and licenses cover composition-of-matter, process, formulations and method-of-treatment claims for ONTX’s clinical-stage product portfolio.
There are several ongoing clinical trials aimed at expanding the use of approved chemotherapeutic and immunomodulatory agents in higher risk MDS. Companies competing in this space include Eisai Inc. (decitabine alone and in combination with clofarabine), Celgene Corporation (azacitidine in combination with lenalidomide or vorinostat (Zolinza®)), Genentech, Inc. (erlotinib), Cell Therapeutics, Inc. (tosedostat in combination with decitabine or cytarabine) and Cyclacel Pharmaceuticals, Inc. (sapacitabine).
To ONTX’sknowledge, there are no Phase 3 trials other than our trial for rigosertib being conducted for higher risk MDS patients who have failed treatment with hypomethylating agents.
In the lower risk MDS market, ONTX faces competition from a number of companies in early-stage clinical trials, such as Celgene Corporation (lenalidomide), Telik, Inc. (ezatiostat (Telintra®)), Spectrum Pharmaceuticals, Inc. (belinostat as monotherapy and in combination with bortezomib (Velcade®)), Astex (SG-110) and Array BioPharma Inc (ARRY-614).
Companies competing in this space include Celgene Corporation, Astellas Pharma, Inc. and Threshold Pharmaceuticals, Inc. Recently, the FOLFIRINOX chemotherapy regimen, combining fluorouracil, leucovorin, irinotecan and oxaliplatin, showed survival improvement over gemcitabine alone in metastatic pancreatic cancer.
However, patients receiving FOLFIRINOX reported higher frequency of toxicities including febrile neutropenia that render its use restricted to selected patients with good performance status. In addition, recent studies have shown that albumin-bound paclitaxel (Abraxane®) in combination with gemcitabine helped patients with advanced pancreatic cancer live a median of 1.8 months longer than those given chemotherapy alone. Gemcitabine and erlotinib are two FDA-approved therapies for this disease. Fluorouracil and mitomycin-C are also approved for the treatment of pancreatic cancer, but these drugs are rarely used as single agents.
There are multiple programs currently in late-stage clinical development for this disease. Ibrutinib, which is a Bruton’s tyrosine kinase inhibitor being developed by Pharmacyclics Inc., is being tested in Phase 2 and 3 trials for MCL.
Acute Radiation Syndromes
Competitors developing products to address ARS include Soligenix, Inc., Cellerant Therapeutics, Inc., and Cleveland BioLabs, Inc. Each of these companies is working with the U.S. government to develop its products through federal contracts and grants.
Pre-IPO 5% stockholders
The Jane & Michael B. Hoffman 2013 Descendants Trust, 21.8%
Michael B. Hoffman, 22.8%
Baxter Healthcare SA, 14.7%
E. Premkumar Reddy, Ph.D., 6.6%
Use of proceeds
ONTX expects to net $52.5 million from its IPO.
$40.0 million of the net proceeds from the IPO are allocated to fund the clinical development of rigosertib and $5.0 million is allocated to fund the development of other clinical and preclinical programs.
The balance will be used for working capital and general corporate purposes.