IPO Report: Proteon Therapeutics (PRTO)

Francis Gaskins  |

Targeting kidney failure, Proteon Therapeutics ($PRTO) initiated the first of two Phase 3 trials for PRT-201 in radiocephalic AVFs, PRTO’s initial indication, in the third quarter of 2014 and expect to initiate the second Phase 3 trial in the first half of 2015. It is headquartered in Waltham, MA.

Four other companies are scheduled for the week of Oct. 20, 2014. The full IPO calendar is available at IPOpremium.

Manager, Joint-managers: Stifel and JMP Securities

Co-managers: Baird and Oppenheimer & Co.

PRTO scheduled a $61 million IPO with a market capitalization of $183 million at a price range midpoint of $13 for Wednesday, Oct. 22, 2014 on Nasdaq. SEC filings

Proteon Therapeutics IPO Report


Targeting kidney failure, PRTO initiated the first of two Phase 3 trials for PRT-201 in radiocephalic AVFs, PRTO’s initial indication, in the third quarter of 2014 and expect to initiate the second Phase 3 trial in the first half of 2015.


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% offered in IPO

Annualizing June 6 mos


Proteon Therapeutics (PRTO)









Targets kidney failure

Initiated 2 Phase 3 trials

Price-to-book 2.4

P/E -17, no revenue

Stockholders may purchase $30.4mm of the IPO, or 50%


PRTO is a late-stage biopharmaceutical company focused on the development of novel, first-in-class pharmaceuticals to address the needs of patients with renal and vascular disease.

PRTO’s product candidate, PRT-201, is a recombinant human elastase that PRTO is developing to reduce vascular access failure in patients with chronic kidney disease undergoing or planning for hemodialysis, a lifesaving treatment that cannot be conducted without a functioning vascular access.

PRTO believes the data from its completed Phase 2 trial of PRT-201 in patients undergoing creation of an arteriovenous fistula, or AVF, support that a one-time, local application of PRT-201 during AVF surgical placement reduces AVF failure, thereby improving patient outcomes and reducing the burden on patients and the healthcare system.

PRTO is not aware of any approved preventative treatments to reduce the failure rate of AVFs.

Phase 3 trials

PRTO initiated the first of two Phase 3 trials for PRT-201 in radiocephalic AVFs, PRTO’s initial indication, in the third quarter of 2014 and expect to initiate the second Phase 3 trial in the first half of 2015.

The need to improve vascular access outcomes is well established in the hemodialysis community.

A 2014 publication estimated the total cost of managing hemodialysis vascular access dysfunction in the United States to be approximately $2.9 billion annually.

AVFs are the gold standard of vascular access for hemodialysis, given they are associated with fewer complications and reduced rates of hospitalization than other forms of vascular access.

PRTO estimates there are approximately 130,000 AVFs created in the United States annually, a procedure in which a surgeon transects a vein and sutures it to the side of a nearby artery, typically in the arm.

AVFs have a greater than 50% failure rate in their first year after placement, resulting in frequent surgical or interventional procedures and a high rate of abandonment, leading to increased morbidity, mortality and costs of care.

Function can usually be restored via additional procedures, either an intervention such as angioplasty, which is dilation of a blood vessel with a balloon, or a surgical revision. However, these procedures are costly, invasive, painful, associated with a number of complications and often need to be repeated.

AVF patients in the United States on average require greater than 1.5 procedures per year, each of which typically costs Medicare between $5,000 and $13,000.

Intellectual property

PRTO owns 20 issued patents and 26 pending patent applications.

The patents and applications primarily fall into two families, a first relating to the PRT-201 formulation and its manufacture and use, as well as other formulations of elastases (the "formulation family"), and the second relating to certain therapeutic uses of PRT-201, and associated systems and kits that include a catheter and are suitable for a subset of those therapeutic uses (the "therapy family").

The formulation family includes one issued United States patent, one issued European patent, additional patents issued in Israel, Mexico, and New Zealand, and patent applications pending in several major jurisdictions worldwide, including Japan, China, South Korea, Brazil, Mexico, Russia, India, Europe and the United States.

The expected expiration date for any patents that have issued or may issue from the formulation family is December 4, 2028, exclusive of possible patent term extension available for one patent covering PRT-201 under the Hatch-Waxman Amendments or comparable provisions in other jurisdictions, except in the United States where PRTO was awarded a patent term adjustment of 199 days due to USPTO delays, taking the expiration date to June 20, 2029.

The therapy family includes seven issued United States patents and two issued European patents, and applications pending in the United States, Europe, Canada and Japan.

The expected expiration date for any patents that have issued or may issue from the therapy family patents is September 24, 2020, except in the United States where several patents were awarded a patent term adjustment and the expected expiration date of two therapy family patents related to systems and kits including elastase and a catheter is June 30, 2021, exclusive of possible patent term extension.


PRTO is not aware of any therapeutic products approved in the United States or Europe for the prevention of AVF or AVG patency loss.

PRTO is aware of other therapies in development for AVF or AVG failure with companies including Vascular Therapies and Celladon.

PRT-201 could face competition from companies developing vascular access technologies.

Other potential competition includes new synthetic grafts, including those that may be developed by companies that currently compete in the graft market, such as W.L. Gore, C.R. Bard and Maquet, as well as tissue engineered grafts, including those in development by Cytograft and Humacyte, including BioConnect Systems, Caymus Medical, Phraxis, CreatiVasc and TVA Medical.

Finally, PRT-201's commercial success could be affected by the development of technologies to improve the outcomes of interventions to restore patency, including stents, stent grafts and drug eluting balloons.

5% shareholders pre-IPO

Abingworth Bioventures VI, LP. 18.3%

TVM Capital and related funds   18.2%

Prism Venture Partners and related funds           14.6%  

Skyline Venture Partners Qualified Purchaser Fund IV, L.P. 14.4%

Pharmstandard International S.A.           10.0%  

Deerfield and related funds        10.0%  

Intersouth Partners VI, L.P.        9.7%

MPM Bio IV NVS Strategic Fund, L.P.    9.7%

Hubert Birner, Ph.D.      18.2%  

Brendan M. O'Leary, Ph.D. 14.6%

John G. Freund, M.D.    14.4%  

Timothy Haines             18.3%

Todd Foley       9.7%

Dmitry Kobyzev  10.0%


No dividends are planned.

Use of proceeds

PRTO expects to net $54 million from its IPO to be used for the following:

$9.4 million to accelerate the commencement of the second of its Phase 3 trials for PRT-201 in its lead indication;

$28.4 million to accelerate its chemistry and manufacturing controls, or CMC, activities;

$1.6 million to fund additional research and development activities; and

the remainder for working capital and general corporate purposes and the costs associated with being a public company.

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