IPO Preview: Inhibikase Therapeutics Files For $18 Million IPO

IPOStreet

Inhibikase Therapeutics (IKT) intends to raise $18 million in an IPO of its common stock, according to an S-1 registration statement.

The firm is advancing a pipeline of treatments for Parkinson's Disease and other neurodegenerative disorders.

IKT is pursuing treatment areas that have proven to be very difficult for major pharma firms to make progress in.

Atlanta, Georgia-based Inhibikase was founded to develop small molecule inhibitory drugs to treat Parkinson's Disease, cancer and other conditions.

Management is headed by founder, president and Chief Executive Officer Mr. Milton Werner, Ph.D., who was previously Director of Research at Celtaxsys, a cell-free immunotherapeutics company.

Below is a brief overview video of Parkinson's Disease:

Source: Osmosis

The firm's lead candidate is IkT-148009 and management is planning to enter Phase 1 safety trials for four indications through two INDs.

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

inhibikasepipe

Source: Company S-1 Filing

Investors in the firm have invested at least $7.6 million and include Dr. Milton Werner, Duke University, Emory University and Daniel Kalman, Ph.D.

According to a 2018 market research report by Transparency Market Research, the global PD therapeutics market was valued at $2.18 billion in 2016 and is projected to reach $5.24 billion by 2025.

This represents a forecast CAGR (Compound Annual Growth Rate) of CAGR of 11% between 2017 and 2025.

Key elements driving this expected growth are the high prevalence of PD, increasing geriatric population globally, as well as an increase in funding for clinical research and grants among others.

The North American and European regions are expected to dominate the worldwide PD therapeutics market due to rise in clinical R&D budgets, the large base of an aging population, as well as increase in awareness regarding the disease in these regions.

The European region is anticipated to grow at the fastest rate of over 11% annually during the period due to various awareness initiatives by governments and non-profit organizations, high prevalence of PD in the developed countries, as well as promising product pipeline.

Also, researchers estimate that PD affects around 7 to 10 million people worldwide, around 1 million of which are US citizens, while the Global Burden of Disease Study expects the disease to affect 13 million people worldwide by 2040.

Major competitive vendors that provide or are developing treatments include:

  • Prothena (PRTA)
  • Roche Holdings (RHHBY)
  • Biogen (BIIB)
  • Neurimmune Holding
  • UCB (UCBJF)
  • Neuropore Therapies
  • Sanofi (SNY)
  • Takeda Pharmaceutical Company (TAK)
  • Denali Therapeutics (DNLI)
  • Prevail Therapeutics (PRVL)

Inhibikase’s recent financial results feature some grant revenue but significant losses due to typical R&D and G&A expenses associated with its development activities.

Below are the company’s financial results for the past two calendar years:

inhibikasepl

Source: Company registration statement

As of December 31, 2019, the company had $18,457 in cash and $4.5 million in total liabilities. (Unaudited, interim)

Inhibikase intends to raise $18 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:

approximately $4.0 million to fund the costs of our Phase 1 clinical trial for IkT-148009 in elderly healthy volunteers and to validate target engagement markers in the central and peripheral nervous system;

approximately $4.0 million to fund comparative pivotal chronic toxicology studies of IkT-148009 v. imatinib in rats for 3 and 6 months and monkeys for 3 and 9 months to meet regulatory requirements for Phase 2 studies;

approximately $1.5 million to complete GMP manufacturing of IkT-001Pro, prepare and complete the IND for IkT-001Pro and to conduct clinical dose-calibration studies for IkT-001Pro relative to Imatinib standard of care;

approximately $42,534 to repay a loan with a maturity date of January 1, 2021 and bearing an interest rate of 5.25 % from our former outside counsel which matures coincident with this offering; and

the remainder, if any, to fund general research and development activities, working capital and other general corporate activities including open accounts payable to include costs for intellectual property prosecution.

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

The sole listed bookrunner of the IPO is ThinkEquity.

Commentary

Inhibikase is seeking public investment capital to advance its pipeline through initial trials.

The firm’s lead candidate, IkT-148009, is a potential treatment for Parkinson’s Disease and other neurodegenerative conditions.

The market opportunity for treating PD is significant and expected to grow moderately in the years ahead.

Management has disclosed no research or commercial collaborations with major pharma firms.

The company’s investor syndicate does not include any known venture capital firms or corporate pharma investors.

ThinkEquity is the sole underwriter and the single IPO led by the firm over the last 12-month period has generated a return of negative (18.5%) since its IPO. This is a bottom-tier performance for all major underwriters during the period.

IKT is a small biopharma that appears to be thinly capitalized while pursuing an extremely difficult area of disease in PD, where major pharma firms have failed so far.

The company's pipeline is also still at a pre-Phase 1 stage, so is ultra high risk.

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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