Ayala Pharmaceuticals (AYLA) has filed an S-1 registration statement to raise $50 million in an U.S. IPO.

The company is advancing small molecule drug treatment candidates for rare and aggressive cancers in genetically targeted patient populations.

AYLA has achieved interesting Phase 2 trial results for its lead program and the firm has a collaboration with Novartis  (NVS) - Get Report for its pre-clinical candidate for the treatment of multiple myeloma.

Rehovot, Israel-based Ayala was founded to to develop treatments for various cancers, including Recurrent/Metastatic adenoid cystic carcinoma, Triple negative breast cancer, Acute lymphoblastic leukemia, and Desmoid and soft tissue tumors

Management is headed by Chief Executive Officer Roni Mamluk, Ph.D., who has been with the firm since 2017 and was previously CEO at biopharmaceutical firm Chiasma and head of preclinical development of an oncology product at Adnexus Therapeutics.

Below is a brief overview video of adenoid cystic carcinoma:

Source: Hack Dentistry

The firm has the worldwide rights to develop AL101, which it acquired from Bristol-Myers Squibb Company  (BMY) - Get Report who had performed Phase 1 safety studies prior to in-licensing.

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


Source: S-1

Investors in the firm have invested at least $54 million to-date and include Israel Biotech Fund, aMoon 2 Fund, Harel Insurance Company, and major pharmaceutical firms Bristol-Myers Squibb, Novartis.

According to a 2020 summary report by Cancer.net, approximately 1,200 people are diagnosed with Adenoid Cystic Carcinoma in the U.S.

60% of those diagnosed are women and the disease is most often discovered in young and middle-aged adults.

The five-year survival rate is a relatively high 89%, while the 15-year survival rate is approximately 40%.

Late recurrence of the cancer is relatively common and is usually diagnosed at the metastatic stage, after it has spread to other parts of the body.

However, the cancer is typically slow growing, so patients with metastatic ACC may live for a long time post-diagnosis.

Ayala’s recent financial results are typical of biopharma firms in that they feature minimal revenue but significant R&D and G&A expenses associated with the development of their pipeline.

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


Source: Company registration statement

At December 31, 2019, the company had $16.8 million in cash and $5.3 million in total liabilities. (Unaudited, interim)

Ayala recently filed to raise $50 million in gross proceeds from an IPO of its common stock, although the final amount may differ.

No existing shareholders have indicated an interest to purchase shares at the IPO price. I expect to see some form of investor ‘support’ for the IPO as this is typical of life science company IPOs, although recent life science IPOs have avoided needing to have this element.

Management says it will use the net proceeds from the IPO to advance its various drug candidates through Phase 2 trials and for working capital and general corporate purposes.

Listed bookrunners of the IPO are Citigroup, Jefferies, Oppenheimer & Co. and Raymond James.


Ayala is seeking public investment to advance its full pipeline of treatment candidates for various forms of adenoid cancer and desmoid tumors.

The firm’s lead candidate is currently in Phase 2 trials and has shown good safety results but just as importantly, significant efficacy data, with a 63% disease control rate. Furthermore, 48% of patients in the trial displayed stable disease, a strong result.

However, the market opportunity for ACC treatment is quite small, given the rareness of the disease. But, the firm’s other drug candidate market potentials are significantly higher.

AYLA is currently collaborating with Novartis on its AL102 drug for the treatment of multiple myeloma delivered in conjunction with Novartis’ B-cell maturation antigen targeting therapies.

I favor biopharma firms with commercial collaborations, so I view this as a positive signal, though it is not with one of the firm’s lead programs.

When we learn details about management’s pricing and valuation expectations, I’ll provide an update.

Expected IPO Pricing Date: To be announced.

(I have no positions in any stocks mentioned as of the article date, no plans to initiate any positions within the next 72 hours, and no business relationship with any company whose stock is mentioned in this article. Information provided is for educational purposes only, may be incomplete or out of date, and does not constitute financial, legal, or investment advice.)