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A Quick Take On Acrivon Therapeutics
Acrivon Therapeutics (ACRV) has filed to raise $119 million in an IPO of its common stock, according to an S-1 registration statement.
The firm is a clinical stage biopharma developing treatments for ovarian, endometrial and bladder cancers.
Notably, the firm’s drug candidate also depends on the co-approval of the OncoSignature test as a companion diagnostic test.
I’ll provide an update when we learn more IPO details from management.
Acrivon Overview
Watertown, Massachusetts-based Acrivon Therapeutics was founded to develop a platform [AP3] that overcomes various limitations of gene-based patient selection methods, promising to improve patient outcomes.
Management is headed by president, Chairman and CEO Peter Blume-Jensen, M.D., Ph.D., who has been with the firm since 2018 and was previously Chief Scientific Officer at XTuit Pharmaceuticals and the same position at Metamark Genetics.
The firm’s lead candidate, ACR-368, is a selective small molecule inhibitor being developed for a number of cancers and is currently in Phase 2 trials.
Below is the current status of the company’s drug development pipeline:
Company Pipeline (SEC EDGAR)
Acrivon has booked fair market value investment of $122.5 million as of December 31, 2021 from investors including Chione Limited, RA Capital Management, Perceptive Life Sciences, Citadel, Wellington Biomedical and Sands Capital Life Sciences.
Acrivon’s Market & Competition
According to a 2018 market research report by bcc Research, the global market for ovarian cancer therapeutics was an estimated $2.1 billion in 2017 and is forecast to reach $2.9 billion by 2022.
This represents a forecast CAGR (Compound Annual Growth Rate) of 7.1% from 2017 to 2022.
Key elements driving this expected growth are a growing incidence of cancers as global populations age and immune system performance is reduced.
Also, new drug classes are expected to be approved, with five new drugs expected to be approved by 2028.
However, the growth in use of biosimilar products and generics will likely act as a drag on growth of the market’s total dollar value over time.
Notably, the GlobalData estimate for the ovarian cancer market has a much higher estimate, with the market forecast to reach $6.7 billion by 2028.
Major competitive vendors that provide or are developing related treatments include:
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Sierra Oncology
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AstraZeneca
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Merck
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Zentalis
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Debiopharm
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Impact Therapeutics
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Repare Therapeutics
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Shouya Holdings
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Others
Acrivon Therapeutics Financial Status
The firm’s recent financial results are typical of a clinical stage biopharma in that they feature no revenue and substantial R&D and G&A expenses associated with its development efforts.
Below are the company’s financial results for the past two years:
Statement Of Operations (SEC EDGAR)
As of December 31, 2021, the company had $99.6 million in cash and $7.9 million in total liabilities.
Acrivon Therapeutics IPO Details
Acrivon intends to raise $119 million in gross proceeds from an IPO of its common stock, although the final figure may differ.
No existing shareholders have indicated an interest to purchase shares at the IPO price, although this element may become a feature of the IPO if disclosed in a future filing.
Management says it will use the net proceeds from the IPO as follows:
to fund our ongoing and planned clinical development, including advancing our lead drug candidate ACR-368 through initial Phase 2 clinical readouts, as well as initiating our Phase 2 trials in patients with HPV+ tumors;
to enter IND-enabling stage for at least one of our preclinical programs and to fund continued development of our AP3 platform; and
the remainder for research and development activities, working capital and other general corporate purposes.
(Source – SEC)
Management’s presentation of the company roadshow is not available.
Regarding outstanding legal proceedings, management said the firm is not presently the target of any material legal proceedings.
Listed bookrunners of the IPO are Morgan Stanley, Jefferies, Cowen and Piper Sandler.
Commentary About Acrivon’s IPO
ACRV is seeking U.S. public capital market investment to advance its primary candidate through Phase 2 trials.
The firm’s lead candidate, ACR-368, is a selective small molecule inhibitor being developed for a number of cancers and is currently in Phase 2 trials.
The market opportunities for the various cancers ACR-368 is targeting are large and expected to grow materially in the years ahead as the global population ages and is subject to a rising incidence of cancer due to reduced immune system function.
Management hasn’t disclosed any major pharma firm collaboration while the company’s investor syndicate includes notable life science venture capital firm investors.
Morgan Stanley is the lead underwriter and IPOs led by the firm over the last 12-month period have generated an average return of negative (35.6%) since their IPO. This is a lower-tier performance for all major underwriters during the period.
An additional risk is that the success of the firm’s candidate depends ‘on the co-approval of the OncoSignature test as a companion diagnostic test.’
When we learn management’s assumptions for IPO pricing and valuation, I’ll provide a final opinion.
Expected IPO Pricing Date: To be announced.
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