IPO Report: vTv Therapeutics (VTVT)

Francis Gaskins |

vTv Therapeutics  (VTVT) is a clinical-stage biopharmaceutical company engaged in the discovery and development of orally administered small molecule drug candidates to fill significant unmet medical needs. The company is based in High Point, NC.

Five other companies are scheduled to IPO for the week of July 27. The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: Piper Jaffray and Stifel

Co-managers: Canaccord Genuity and Janney Montgomery Scott

End of lockup (180 days): Tuesday, January 26, 2016

End of 25-day quiet period: Monday, August 24, 2015

VTVT scheduled a $125 million IPO with a market capitalization of $520 million at a price range midpoint of $16 for Thursday, July 30, 2015 on Nasdaq.

vTv Therapeutics  (VTVT) IPO Summary

VTVT is a clinical-stage biopharmaceutical company engaged in the discovery and development of orally administered small molecule drug candidates to fill significant unmet medical needs.

VTVT has a powerful pipeline of clinical drug candidates, led by its programs for the treatment of Alzheimer’s disease (“AD”) and type 2 diabetes.

Valuation
Glossary

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

vTv Therapeutics (VTVT)

$528

no sales

-13.5

4.8

4.8

24%

             

vTv Therapeutics  (VTVT) IPO Conclusion

Neutral plus

Alzheimer's disease ("AD") and type 2 diabetes

Phase 3 clinical trial

Under an FDA-agreed Special Protocol Assessment

Azeliragon has been awarded Fast Track designation by the FDA

New company reorganiztion to get rid of the $561mm accumullated deficit

Price to book of 4.8

P/E of -13. indicating moderate cash burn relative to market cap

vTv Therapeutics  (VTVT) Business

VTVT is a clinical-stage biopharmaceutical company engaged in the discovery and development of orally administered small molecule drug candidates to fill significant unmet medical needs.

Drug candidates

VTVT has a powerful pipeline of clinical drug candidates, led by its programs for the treatment of Alzheimer’s disease (“AD”) and type 2 diabetes.

Alzheiver's disease

VTVT’s drug candidate for the treatment of AD, azeliragon (TTP488), is an orally administered, small molecule antagonist targeting the receptor for advanced glycation endproducts (“RAGE”). 

VTVT has commenced patient enrollment in a Phase 3 clinical trial (the “STEADFAST Study”) under an FDA-agreed Special Protocol Assessment (“SPA”).

Azeliragon has been awarded Fast Track designation by the FDA. RAGE is a cell surface receptor that is implicated in many of the processes thought to play a primary role in the development and progression of AD, including amyloid-beta (“Aβ”) transport into the brain, the phosphorylation of tau protein, chronic inflammation, vascular dysfunction, metabolic dysregulation and neurotoxicity.

By inhibiting RAGE, azeliragon has the potential to slow the progression of cognitive decline in mild and mild-to-moderate AD patients. VTVT is not aware of any other clinical-stage drugs targeting RAGE.

Unlike development stage disease-modifying treatments from other companies that target a singular cause of AD, azeliragon is designed to interact with multiple aspects of AD etiology.

VTVT is currently enrolling the 800-patient STEADFAST Study, a Phase 3 clinical trial, under an FDA-agreed SPA.

The STEADFAST Study includes two sub-studies under one protocol (sub-study A and sub-study B).

Each sub-study will enroll 400 patients with mild AD, randomized to receive a 5 mg/day dose of azeliragon or placebo on a one-to-one basis, and is powered to achieve statistical significance on the co-primary endpoints—change from baseline in ADAS-COG11 and CDR-SB scores, which are standard measures of cognitive impairment and global function in AD patients.

VTVT's Phase 2b study of azeliragon in 399 mild-to-moderate AD patients demonstrated a statistically significant benefit at the 5 mg/day dose versus placebo at 18 months with respect to ADAS-COG11 and a statistically significant lower frequency of psychiatric adverse events.

At the same dose, VTVT identified an even more pronounced benefit in ADAS-COG11 and CDR-SB scores in an analysis of the sub-population of patients with mild AD.

In all of VTVT's Phase 1 and 2 clinical trials, azeliragon has been shown to be generally safe and well tolerated at a dose of 5 mg/day.

VTVT expects to report topline data from sub-study A of the STEADFAST Study in late 2017 and from sub-study B in mid-2018.

If results from sub-study A are favorable, VTVT plans to initiate discussions with the FDA regarding a new drug application (“NDA”) for azeliragon in early 2018 and submit the NDA later in 2018.

Type 2 Diabetes

VTVT’s type 2 diabetes drug candidates include TTP399, an orally administered, liver-selective glucokinase activator (“GKA”), for which VTVT is currently enrolling patients in a Phase 2b clinical trial (the “AGATA Study”), and TTP273, an orally administered, non-peptide agonist that targets the glucagon-like peptide-1 receptor (“GLP-1r”), which VTVT anticipates will enter a Phase 2 clinical trial in early 2016.

VTVT has three additional programs in various stages of clinical development for the prevention of muscle weakness and the treatment of inflammatory disorders.

Market for Alzheimer's Drugs

Alzheimer’s disease is a progressive neurodegenerative disorder that slowly destroys memory and thinking skills, with a number of other behavioral and neuropsychiatric symptoms.

While estimates of the prevalence of AD vary, the Alzheimer’s Association estimates that in 2015 there are 5.3 million people in the United States suffering from AD.

According to Decision Resources, in 2013, there were 8.3 million AD patients in the “G7 Pharmaceutical Markets,” including 3.1 million in the United States and 5.2 million in Western Europe (France, Germany, Italy, Spain and the United Kingdom) and Japan.

Mild AD patients represent approximately 64% of the overall AD population.

There are currently no disease-modifying therapies approved for the treatment of AD; however, according to Decision Resources, this segment of the market is expected to grow to $7.7 billion by 2023, representing approximately 60% of expected 2023 revenues in the global AD market.

vTv Therapeutics  (VTVT) Intellectual Property

The IP portfolio for azeliragon includes a patent family covering azeliragon as a composition of matter, a patent family covering polymorphs of azeliragon and a patent family covering select methods of treatment using azeliragon.

Azeliragon as a composition of matter is covered by issued patents in the United States, Europe, Japan, Canada, Australia, China and Hong Kong.

The issued U.S. patent covering azeliragon as a composition of matter is expected to expire in 2029, assuming VTVT obtains the maximum possible extension.

Patents covering azeliragon as a composition of matter outside the United States will expire no earlier than 2023 and may expire much later as a result of patent term extensions based on patent office delays, regulatory delays, or a combination thereof.

The IP portfolio for TTP399 includes a patent family covering TTP399 as a composition of matter, a patent family covering combinations of TTP399 and metformin, a patent family covering combinations of TTP399 and DPP-4 inhibitors or GLP-1r agonists, and patent families covering two different solid formulations of TTP399.

The patent family covering TTP399 as a composition of matter was filed in multiple jurisdictions around the world including the United States, Europe, Japan and Canada.

The issued U.S. patent covering TTP399 as a composition of matter is expected to expire in 2030, assuming VTVT obtains the maximum possible extension.

Patents covering TTP399 as a composition of matter outside the United States will expire no earlier than 2025 and may expire much later as a result of patent term extensions based on patent office delays, regulatory delays, or a combination thereof. Some patents and patent applications covering TTP399 as a composition of matter are licensed from Novo Nordisk A/S, while others are owned by VTVT.

vTv Therapeutics  (VTVT) Competition

VTVT’s potential competitors include large pharmaceutical and biotechnology companies, specialty pharmaceutical companies and generic drug companies.

VTVT believes the key competitive factors that will affect the development and commercial success of its drug candidates are efficacy, safety and tolerability profile, mechanism of action, control and predictability, convenience of dosing and price and reimbursement.

There are currently no approved disease-modifying treatments for AD in the United States, as existing therapies treat only the symptoms of the disease, rather than targeting the underlying mechanisms.

The approved symptomatic AD therapies in the United States fall into two classes, AChEIs and glutamatergic modulators.

If azeliragon is approved, it may potentially compete with drug candidates with differentiated mechanisms currently in development as potential disease modifying treatments for AD, including anti-Aβ monoclonal antibodies, BACE inhibitors, tau aggregation inhibitors and monoamine oxidase-b inhibitors. VTVT is not aware of any other clinical-stage RAGE inhibitors for the treatment of AD.

VTVT expects that its type 2 diabetes drug candidates will compete with currently available non-insulin medication products for type 2 diabetes. These products include the following:

Injectable GLP-1r agonists, such as exenatide or liraglutide, which mimic a naturally occurring hormone that stimulates the pancreas to secrete insulin when blood glucose levels are high.

DPP-4 inhibitors, such as sitagliptin or saxagliptin, are a class of drugs that work by blocking the enzyme that normally degrades GLP-1.

Sulfonylureas and meglitinides, which are classes of drugs that act on the pancreatic cells to stimulate the secretion of insulin.

Thiazolidinediones, such as pioglitizone, and biguanides, such as metformin, which lower blood glucose by improving the sensitivity of cells to insulin, or diminishing insulin resistance.

Glucokinase activators: Advinus Therapeutics Ltd., Eli Lilly and Company, Pfizer Inc., Hua Medicine Ltd. and Teijin Pharma Limited are among the companies evaluating glucokinase activators in clinical or preclinical studies.

Oral GLP-1r agonists: Diabetology Ltd., Novo Nordisk, Oramed Pharmaceuticals Inc., Poxel SA and Receptos, Inc. are among the companies evaluating oral GLP-1r agonists in clinical or preclinical studies.

vTv Therapeutics  (VTVT) 5% Shareholders Pre-IPO

Ronald O. Perelman 100.0%

MacAndrews & Forbes may purchase up to $25mm of the IPO.  MacAndrews is a company that acquires and manages a diversified portfolio of public and private companies. Wholly owned by Chairman and Chief Executive Officer Ronald O. Perelman

vTv Therapeutics  (VTVT) Dividends

No dividends are planned.

vTv Therapeutics  (VTVT) IPO Use of Proceeds

VTVT expects to receive $116 million from its IPO and use it for the following:

$70.0 to $80.0 million to fund the Phase 3 clinical development of azeliragon, including the STEADFAST Study;

$10.0 to $15.0 million to fund its planned Phase 2 trials for the clinical development of its type 2 diabetes drug candidates; and

the remainder to fund further clinical development of its other drug candidates and 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
VTVT vTv Therapeutics Inc. 5.14 -0.24 -4.46 27,356

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