IPO Launch: Immunome Prepares For $30 Million IPO

IPOStreet

Immunome (IMNM) intends to raise $30 million in an IPO of its common stock, according to an S-1 registration statement.

Exton, Pennsylvania-based Immunome was founded to develop antibody therapeutics with a primary focus on cancer treatments and the more recent addition of developing antibodies for SARS-CoV-2, or Covid-19.

Management is headed by president and Chief Executive Officer Mr. Purnanand Sarma, Ph.D, who has been with the firm since June 2019 and was previously president and CEO of Taris Biomedical and VP and General Manager of World-wide Drug Delivery Technologies at Cephalon.

Below is a brief overview video of antibody-based therapies for cancer:

Source: Creative Biolabs

The firm's lead candidate, IMM-ONC-01, is being developed for treating various cancers. However, the firm has not indicated which cancers it will focus on.

Management expects to file an IND for this program in the second half of 2021.

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

immunomepipe

Source: Company S-1 Filing

Investors in the firm have invested at least $48 million and include BCM Advisory Partners and I. Wistar Morris.

According to a 2018 market research report by Global Market Insights, the global market for biological treatments for cancer was an estimated $69 billion in 2017 and is expected to reach $108 billion by 2024.

This represents a forecast CAGR (Compound Annual Growth Rate) of 6.8% from 2018 to 2024.

Key elements driving this expected growth are a rising prevalence of cancer worldwide due to an aging population coupled with increasing use of alcohol and tobacco, and continued development of biological treatment options.

However, the high cost of biological treatments may slow adoption of these treatment options for patients.

Major competitive vendors that provide or are developing treatments include:

  • AbCellera Biologics
  • Adaptive Biotechnologies (ADPT)
  • AIMM Therapeutics
  • Atreca (BCEL)
  • IGM Biosciences (IGMS)
  • OncoResponse
  • Vir Biotechnology (VIR)
  • AstraZeneca (AZN)
  • Bristol-Myers Squibb (BMY)
  • Genentech
  • Merck (MRK)
  • F. Hoffmann La Roche

Immunome’s recent financial results are typical of a preclinical stage biopharma in that they feature no revenue and significant R&D and G&A expenses associated with its research efforts.

Below are the company’s financial results for the past two and ½ years (Audited PCAOB for full years):

immunomepl

Source: Company registration statement

As of June 30, 2020, the company had $9.8 million in cash and $3.1 million in total liabilities. (Unaudited, interim)

Immunome intends to raise $30 million in gross proceeds from an IPO of 2.5 million shares of its common stock, offered at a midpoint price of $12.00 per share.

Certain existing shareholders have indicated an interest to purchase shares of up to $20.0 million in the aggregate at the IPO price. This is a positive signal of investor support for the IPO.

Assuming a successful IPO, the company’s enterprise value at IPO would approximate $101.6 million, excluding the effects of underwriter over-allotment options.

Management says it will use the net proceeds from the IPO as follows:

approximately $6.5 million to fund further development of our IMM-ONC-01 program;

approximately $5.8 million to fund further development of our IMM-BCP-01 program;

approximately $5.9 million to advance our platform and research pipeline; and

the remainder to fund other research and development activities, working capital and general corporate purposes.

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

Listed bookrunners of the IPO are Ladenburg Thalmann and Chardan.

Commentary

Immunome is pursuing an IPO to advance its two programs into Phase 1 clinical trials.

Management hasn’t been specific about which cancers its lead candidate is going to seek to treat, so we can’t really evaluate its proposed market size in that respect.

The market opportunity for antibody-based cancer treatment is large and expected to grow materially in the years ahead.

The firm has disclosed no research or big pharma collaborations.

The company’s investor group does not include any well known life science venture capital firms.

Ladenburg Thalmann is the lead left underwriter and there is no data on its IPO involvement over the last 12-months.

As to valuation, management is asking IPO investors to pay an enterprise value of approximately $102 million, a figure that is substantially below the typical range for biopharma IPOs.

As a general approach, I’m not in favor of individuals investing in preclinical stage biopharma firms at IPO, as they represent such a high risk that is more suited to long-term hold institutional investors.

Accordingly, my opinion on the Immunome IPO is to AVOID it.

Expected IPO Pricing Date: Week of September 28, 2020

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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