IPO Report: Wave Life Sciences Pte Ltd. (WVE)

Francis Gaskins |

Wave Life Sciences Pte Ltd. (WVE) is a preclinical biopharmaceutical company with an innovative and proprietary synthetic chemistry drug development platform that WVE is using to design, develop and commercialize a broad pipeline of first-in-class or best-in-class nucleic acid therapeutic candidates. The company is based in Singapore.

Five other companies are scheduled for the week of Nov 9. The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: Jefferies, Leerink Partners
Co-managers: JMP Securities, SunTrust Robinson Humphrey

End of lockup (180 days): Sunday, December 6, 2015
End of 25-day quiet period: Monday, May 9, 2016

WVE scheduled an $80 million IPO with a market capitalization of $319 million at a price range midpoint of $16 for Wednesday, Nov. 11, 2015 on Nasdaq.

Summary

WVE is a preclinical biopharmaceutical company with an innovative and proprietary synthetic chemistry drug development platform that WVE is using to design, develop and commercialize a broad pipeline of first-in-class or best-in-class nucleic acid therapeutic candidates.

Nucleic acid therapeutics have the potential to address diseases that have been difficult to treat with small molecule drugs or biologics.

Valuation

Glossary

Accumulated deficit (mm)

.

.

-$23

     

Per share dilution

.

.

-$9.92

     
             

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

Wave Life Sciences Pte Ltd. (WVE)

$376

n/a

-26.1

2.6

2.6

21%

             

Conclusion

Neutral

Shareholders may purchase $32mm, 40%

Nucleic acid therapeutics

Max-Planck-Innovation GmbH agreement

P/E of -26, indicating moderate cash burn relative to market cap

Price to book of 2.6

Business

WVE is a preclinical biopharmaceutical company with an innovative and proprietary synthetic chemistry drug development platform that WVE is using to design, develop and commercialize a broad pipeline of first-in-class or best-in-class nucleic acid therapeutic candidates.

Nucleic Acid Therapeutics

Nucleic acid therapeutics have the potential to address diseases that have been difficult to treat with small molecule drugs or biologics.

Currently, there are two nucleic acid therapeutics that have received regulatory approval by the U.S. Food and Drug Administration, or FDA, and others are in development.

WVE is initially developing nucleic acid therapeutics that target genetic defects to either reduce the expression of disease-promoting proteins or transform the production of dysfunctional mutant proteins into the production of functional proteins.

Pre-clinical Trials

Preclinical studies have demonstrated that WVE's stereopure nucleic acid therapeutics may achieve superior drug properties as compared to mixture-based nucleic acid therapeutics.

WVE's platform is designed to enable us to rationally design, optimize and produce stereopure nucleic acid therapeutics.

Plans to initiate Phase 1 clinical trials

Stereopure

The nucleic acid therapeutics WVE is developing are stereopure, meaning they are comprised of molecules having atoms uniformly arranged in three-dimensional orientations, which WVE believes is advantageous for making drugs with consistent pharmacologic properties.

The stereopure therapies WVE is developing differ from the mixture-based nucleic acid therapeutics currently on the market and in development by others. Those therapies are mixtures of many thousands of molecules, each having varying three-dimensional atomic arrangements.

Such variations may lead to potentially differing pharmacologic properties, with some constituent molecules producing therapeutic effects and others being less beneficial or even contributing to undesirable side effects.

Scientific Founders

Building upon the innovative work of WVE’s scientific founders, Gregory L. Verdine, Ph.D. and Takeshi Wada, Ph.D., its preclinical studies have demonstrated that its stereopure nucleic acid therapeutics may achieve superior drug properties as compared to mixture-based nucleic acid therapeutics.

Platform

WVE’s platform is designed to enable WVE to rationally design, optimize and produce stereopure nucleic acid therapeutics.

Further, it has the potential to be used to design therapies that utilize any of the major molecular mechanisms employed by nucleic acid therapeutics, including antisense, ribonucleic acid interference, or RNAi, and exon skipping, as described below.

WVE’s goal is to develop disease-modifying drugs for indications with a high degree of unmet medical need, in both orphan and broad diseases. WVE is initially focused on designing single-stranded nucleic acid therapeutics that can distribute broadly within the human body, allowing WVE to target diseases across multiple organ systems and tissues, through both systemic and local administration.

Intellectual Property

Max-Planck-Innovation GmbH

In June 2015, WVE entered into an agreement with Max-Planck-Innovation GmbH, or MI, pursuant to which WVE obtained a co-exclusive royalty-bearing, worldwide license, with the right to sublicense, to research, develop, manufacture and commercialize products in all fields of use under certain patent rights owned by Max-Planck-Gesellschaft, or MPG, and patent rights owned by University of Massachusetts Medical School, or UMMS, which has been granted to WVE by MI, a wholly-owned subsidiary of MPG, acting as MPG’s technology transfer agency and UMMS’s authorized licensing agency for such patents. MPG and MI are collectively referred to herein as Max-Planck.

WVE’s patent rights under this license are to patent filings that relate to certain sequence and structural features of single-stranded RNA molecules that mediate target-specific RNA interference, and include both filings that are owned by Max Planck and arose from research conducted by Thomas Tuschl, Ph.D. and his colleagues at the Max-Planck-Institute for Biophysical Chemistry, and also an issued U.S. patent owned by the University of Massachusetts, or UMASS, that prevailed in an interference with one of the Max-Planck filings and was subsequently included, through a separate agreement between Max-Planck and UMASS, within the portfolio that Max-Planck is authorized to license.

The Max-Planck licensed patent portfolio includes issued U.S. and Canadian patents, and pending U.S. and European patent applications, each of which has a projected 20 year term that extends into 2023.

WVE intends to develop and commercialize diagnostic and therapeutic products based on its patent rights under this license, although currently WVE does not rely on the patent rights under this license for any of its drug candidates under development in its therapeutic or discovery programs.

Max-Planck retains the right to practice the intellectual property licensed under the agreement for non-commercial purposes.

WVE’s license is one of two maximum allowable co-exclusive licenses for these patents, the other of which is currently held by Isis Pharmaceuticals, Inc., or Isis. If either WVE or Isis terminates its respective co-exclusive portion of the license, Max-Planck is obligated to grant the other party an exclusive license on substantially the same terms and conditions previously applicable to the terminated co-exclusive licensee.

Competition

While WVE believes that its expertise in nucleic acid therapeutics, scientific knowledge and intellectual property estate provide it with competitive advantages, WVE faces potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions.

Not only must WVE competes with other companies that are focused on nucleic acid therapeutics, but any product candidates that WVE successfully develops and commercializes will compete with existing therapies and new therapies that may become available in the future.

5% Shareholders Pre-IPO

RA Capital Healthcare Fund, L.P.           35.8%

Kagoshima Sinsangyo Sousei Investment Limited Partnership     21.7%

Shin Nippon Biomedical Laboratories, Ltd.         12.8%

Foresite Capital Fund III, L.P.     9.2%      

FMR LLC          8.3%

Peter Kolchinsky, Ph.D.             35.8%

Ken Takanashi   12.8%    

Masaharu Tanaka          21.7%                 

Dividends

No dividends are planned.

Use of Proceeds

WVE expects to receive $71 million from its IPO and use it for the following:

$11.3 million to fund additional preclinical studies and Phase 1 clinical trials for its HD HTT SNP-1 program;

$13.4 million to fund the selection of a lead product candidate and additional preclinical studies and Phase 1 clinical trials for its HD HTT SNP-2 program;

$14.2 million to fund additional preclinical studies and Phase 1 clinical trials for its DMD Exon 51 program; and

$11.6 million to fund the selection of a lead product candidate and additional preclinical studies and Phase 1 clinical trials for its IBD SMAD7 program.

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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