AlloVir (ALVR) intends to raise $100 million in an IPO of its common stock, according to an S-1 registration statement.

The company is a mid-stage clinical biopharma firm developing treatments for various virus infections.

ALVR is seeking funding to advance its lead candidate’s multiple programs into pivotal trials.

I’ll provide an update when we learn IPO pricing and valuation details.

Cambridge, Massachusetts-based AlloVir was founded to advance a pipeline of treatment candidates for viruses, including a preclinical stage program for Covid19 virus.

Management is headed by Chief Executive Officer Mr. David Hallal, who has been with the firm since September 2018 and was previously in various executive roles at Alexion Pharmaceuticals, most recently as CEO.

Below is a brief overview video of the BK virus (Hemorrhagic cystitis):

Source: Osmosis

The firm's lead candidate, Viralym-M, is targeting five viruses, BK, CMV, AdV, EBV and HHV-6.

Additional programs are targeting the Covid19 virus, RSV, influenza, PIV, hMPV, HBV and HHV-8 viruses.

Below is the current status of the company’s drug development pipeline:

allovirpipe2

Source: Company S-1 Filing

Investors in the firm have invested at least $176 million and include ElevateBio and Fidelity.

According to a 2020 market research report by Fortune Business Insights, the global market for antiviral drugs was valued at $36.1 billion in 2018 and is forecast to reach $44.2 billion by 2026.

This represents a forecast CAGR (Compound Annual Growth Rate) of 3.2% from 2019 to 2026.

However, with the advent of the Covid19 virus, the potential growth of this market is likely to increase substantially as treatments or vaccines are discovered.

Key elements driving this expected growth are the Covid19 pandemic, continued growth in the number of people affected by HIV, and an increasing frequency in viral outbreaks in the Asia Pacific region.

Also, the Asia Pacific region is likely to see the highest growth in demand for treatments due to increasing incidence of viral diseases including swine flu, dengue and Ebola.

Major competitive vendors that provide or are developing treatments include:

  • Atara Biotherapeutics (ATRA)
  • Amplyx Pharmaceuticals
  • Takeda Pharmaceutical (TAK)
  • Helocyte
  • AstraZeneca (AZN)
  • Ansun BioPharma
  • Gilead Sciences (GILD)

AlloVir’s recent financial results are typical of a biopharma firm at IPO in that they feature little revenue and significant R&D and G&A costs associated with its development program.

Below are the company’s financial results for the past two and ¼ years (Audited PCAOB for full years):

allovirpl2

Source: Company registration statement

As of March 31, 2020, the company had $115.7 million in cash and $15.6 million in total liabilities. (Unaudited, interim)

AlloVir intends to raise $100 million in gross proceeds from an IPO of its common stock, although the final amount may be different.

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 expenses for our planned Phase 2 and Phase 3 clinical trials of our lead product candidate, Viralym-M;

to fund expenses for our planned clinical trials of ALVR106, ALVR107, ALVR108 and ALVR109; and

the remainder, if any, for working capital and general corporate purposes.

Management’s presentation of the company roadshow is not available.

Listed bookrunners of the IPO are Morgan Stanley, J.P. Morgan, SVB Leerink and Piper Sandler.

Commentary

AlloVir is seeking public investment to advance its ambitious and extensive pipeline to develop prevention and treatments for viral conditions.

The firm’s lead candidate is in Phase 2/3 trials targeting multiple viruses.

In addition, the company has a preclinical effort to treat the Covid19 virus.

The market opportunities for these programs are large and expected to grow at a low to moderate pace, with the exception of the Covid19 treatment, which has a global market size.

AlloVir has disclosed no research or commercial collaborations with major pharma firms, so is pursuing a largely ‘go it alone’ approach at the current time.

Morgan Stanley is the lead left underwriter and IPOs led by the firm over the last 12-month period have generated an average return of 68.5% since their IPO. This is a top-tier performance for all major underwriters during the period.

ALVR has a large pipeline of programs and appears to be well capitalized. Assuming the IPO market remains strong, I expect the firm to garner significant investment.

When we learn more about the IPO, I’ll provide a final opinion.

Expected IPO Pricing Date: To be announced.

Glossary Of Terms

(I have no position in any stocks mentioned as of the article date, no plans to initiate any positions within the next 48 hours, and no business relationship with any company whose stock is mentioned in this article. IPO stocks can be very volatile in the days immediately after an IPO. Information provided is for educational purposes only, may be in error, incomplete or out of date, and does not constitute financial, legal, or investment advice.)

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