IPO Launch: PMV Pharmaceuticals Proposes Terms For $125 Million IPO

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PMV Pharmaceuticals (PMVP) intends to raise $125 million in an IPO of its common stock, according to an S-1 registration statement.

The firm is developing tumor agnostic gene therapies for a wide range of cancers.

While PMVP has recently received approval to enter Phase 1 trials for its lead candidate, the firm is still at a preclinical stage of development and thus is likely more suited to long-term hold institutional investors.

Cranbury, New Jersey-based PMV was founded to develop treatment technologies seeking to correct p53 mutations in proteins, thereby reinstating their tumor suppressing function.

Management is headed by president and Chief Executive Officer Mr. David Mack, Ph.D, who has been with the firm since June 2013 and was previously a general partner at venture capital firm Alta Partners and before that VP of Genomics Research at Eos Biotechnology.

Below is a brief overview video of the p53 protein mutation:

Source: Shomu's Biology

The firm's lead candidate, PC14586, is scheduled to begin Phase 1/2 trials by the end of 2020 and management's strategy is to seek regulatory approval under an accelerated pathway.

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

pmvpipe2

Source: Company S-1 Filing

Investors in the firm have invested at least $169 million and include InterWest Partners, OrbiMed Advisors, Euclidean Capital, Nextech Oncology and Viking Global.

The combined market sizes of these cancers is extremely large, in the tens of billions of dollars on a global basis.

Management is pursuing a tumor agnostic development approach, but says that its potential treatment universe includes '1.0% - 1.5% of all cancers, including breast, NSCLC, colorectal, pancreatic and ovarian cancers.'

Pancreatic cancer is an especially deadly form of cancer with very low 5-year survival rates, partially due to its stealthy advance without the patient knowing about it until it is in more advanced stages.

Major competitive vendors that provide or are developing treatments include:

  • Actavalon
  • Aprea Therapeutics (APRE)
  • CDG Therapeutics
  • Cotinga Pharmaceuticals (COTQF)
  • Innovation Pharmaceuticals (IPIX)
  • Senhwa Biosciences
  • Aileron Therapeutics (ALRN)
  • Ascentage Pharma
  • Boehringer Ingelheim
  • Daiichi Sankyo (DSKYF)
  • Kartos Therapeutics
  • Novartis (NVS)
  • Roche (RHHBY)

Management says, 'There are currently no drugs approved by the FDA and we are not aware of any other products in clinical development that selectively target the p53 Y220C mutation.'

PMV’s recent financial results are typical for a biopharma firm in that they feature no revenue and substantial R&D and G&A expenses associated with advancing its candidates into clinical trials.

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

pmvpl2

Source: Company registration statement

As of June 30, 2020, the company had $78.1 million in cash and $5.2 million in total liabilities. (Unaudited, interim)

PMV intends to raise $125 million in gross proceeds from an IPO of 7.35 million shares of its common stock offered at a proposed midpoint price of $17.00 per share.

No existing shareholders have indicated an interest to purchase shares at the IPO price, a common feature of life science IPOs.

Assuming a successful IPO, the company’s enterprise value at IPO would approximate $500 million, excluding the effects of underwriter over-allotment options.

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

to fund the Phase 1/2 development of PC14586;

to support the development of our R273H program, including lead optimization and IND-enabling studies;

for the development of our pipeline discovery programs; and

the remaining proceeds, if any, for other research and development opportunities, working capital and general corporate purposes.

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

Listed bookrunners of the IPO are Goldman Sachs, BofA Securities, Cowen and Evercore ISI.

Commentary

PMV is seeking public investment funding to advance its small pipeline into Phase 1 trials.

The firm’s lead candidate has just received approval to enter Phase 1 trials.

The market opportunity for various solid tumor treatments is large and expected to grow substantially in the near future.

Management has disclosed no research or pharma firm collaborations to-date.

The company’s investor syndicate includes several high profile life science venture capital firm investors which is an indicator of the company’s potential.

Goldman Sachs is the lead left underwriter and IPOs led by the firm over the last 12-month period have generated an average return of 62.4% since their IPO. This is a top-tier performance for all major underwriters during the period.

As to valuation, the IPO is valued at the top end of the typical range for clinical stage biopharma firms.

However, PMV has just received approval for entering Phase 1 trials, so the firm has no initial efficacy or safety data upon which to learn of its promise.

The IPO may be more suited to long-term hold institutional investors.

My opinion is to AVOID it due to its preclinical stage of development and ultra-high-risk profile.

Expected IPO Pricing Date: Week ending September 25.

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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