IPO Preview: Inozyme Pharma Begins $86 Million IPO Rollout
Inozyme Pharma (INZY) aims to raise $86.25 million in an IPO of its common stock, according to an S-1 registration statement.
The firm is developing treatment candidates for rare diseases of abnormal mineralization in various parts of the human body.
INZY has produced intriguing preclinical results for its lead programs.
I’ll provide a final opinion when we learn more details about the IPO from management.
Boston, Massachusetts-based Inozyme was founded to advance treatments for defective gene expression of the ENPP1 and ABCC6 genes that produce increased arterial calcification and other deleterious calcium deposition effects throughout the body in the vasculature, soft tissue and skeleton.
Management is headed by president and Chief Executive Officer Mr. Axel Bolte, who has been with the firm since 2015 and was previously managing member of a healthcare advisory firm and venture partner at HBM Partners, AG.
Below is a brief overview video of a coronary calcification:
Source: John Rumberger
The firm's lead candidate is INZ-701, which is a genetically engineered protein 'that is designed to correct a defect in the mineralization pathway caused by ENPP1 and ABCC6 deficiencies.'
Management is preparing the candidate to enter Phase 1/2 trials in the second half of 2020.
Below is the current status of the company’s drug development pipeline:
Source: Company S-1 Filing
Investors in the firm have invested at least $113 million and include Longitude Venture Partners, New Enterprise Associates, Novo Holdings, Sofinnova Venture Partners, Pivotal bioVenture Partners, RA Capital Management and Cowen Healthcare Investments.
According to a market research report by National Organization for Rare Disorders, generalized arterial calcification of infancy [GACI] occurs in approximately 1 out of every 391,000 births, affects males and females equally and occurs in all regions of the world.
GACI type 1 occurs in 75% of patients, who are at increased risk of developing rickets or other bone-related deformities and short stature.
Also, GACI type 2 occurs in 10% of patients, who are older and have increased risk of developing 'pseudoxanthoma elasticum [PXE], involving the elastic tissue of the skin, the eye, cardiovascular and gastrointestinal systems.’
There are currently no approved therapies for the treatment of either ENPP1 or ABCC6 deficiencies. Current treatments are only palliative.
Inozyme’s recent financial results are typical for a development stage biopharma in that they feature no revenue and significant R&D and G&A costs associated with advancing its drug candidates into trials.
Below are the company’s financial results for the past two and ¼ years (Audited PCAOB for full years):
Source: Company registration statement
As of March 31, 2020, the company had $40.8 million in cash and short-term investments and $4.9 million in total liabilities. (Unaudited, interim)
Inozyme intends to raise $86.25 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 it is common to see such investor ‘support’ for life science IPOs.
Management says it will use the net proceeds from the IPO ‘for the completion of our IND and CTA submissions and conduct of our Phase 1/2 clinical trial of INZ-701 for ENPP1 deficiency; for the completion of our CTA submission and conduct of our Phase 1/2 clinical trial of INZ-701 for ABCC6 deficiency; and the remainder for preclinical studies for research stage programs, working capital and other general corporate purposes.’
Management’s presentation of the company roadshow is not available.
Listed bookrunners of the IPO are BofA Securities, Cowen, Piper Sandler and Wedbush PacGrow.
Inozyme is seeking a typical IPO transaction size to begin Phase 1/2 trials for its co-lead candidates.
The firm’s lead co-candidates produced promising results in preclinical studies, with reduced ectopic calcification in a variety of tissues and prevention of the disease spreading to the heart and aorta.
The market opportunity for the firm’s co-lead programs is estimated by management to exceed 30,000 patients per year in major western markets.
Management has disclosed no research or commercial collaborations to-date, so the firm is currently pursuing a ‘go it alone’ approach.
INZY has a strong investor syndicate with a number of frequent life science investors.
BofA Securities is the lead left underwriter and IPOs led by the firm over the last 12-month period have generated an average return of 39.6% since their IPO. This is a top-tier performance for all major underwriters during the period.
INZY has had promising preclinical results but the firm is still at a very early stage of development, so the IPO may be more suited to long-term hold time frame institutional investors.
I’ll provide an update when we learn more IPO details from management.
Expected IPO Pricing Date: To be announced.
(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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