IPO Preview: Poseida Therapeutics Begins $115 Million IPO Process

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Poseida Therapeutics (PSTX) intends to raise $115 million in an IPO of its common stock, according to an S-1 registration statement.

The firm is advancing a broad pipeline of genetic and CAR-T-based therapies for blood, solid and other cancers.

PSTX has achieved promising early stage trial results for its co-lead candidates.

San Diego, California-based Poseida was founded to develop CAR-T and Cas-CLOVER genetic therapy approaches to treating cancers and other cancers.

Management is led by Chief Executive Officer Mr. Eric Ostertag, M.D., Ph.D, who has been with the firm since 2015 and was previously CEO and president of Transposagen, a gene editing company.

Below is a brief overview video of Poseida's approach:

Source: Alliance for Regenerative Medicine

The firm's lead candidate is P-BCMA-101, a CAR-T treatment for patients with multiple myeloma.

The drug is currently in Phase 2 trials, which if successful, could support the firm seeking accelerated regulatory approval.

P-BCMA-101 is the only drug in clinical trials for the firm. All other drug candidates are still at preclinical stages.

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

poseidapipe

Source: Company S-1 Filing

Investors in the firm have invested at least $227 million and include Malin Life Science, Novartis Pharma (NVS), and Longitude Venture Partners.

According to a 2020 market research report, the global market for multiple myeloma treatments was valued at $19.5 billion in 2018 and is expected to reach an estimated $31 billion by 2026.

This represents a forecast CAGR (Compound Annual Growth Rate) of 6.0% from 2019 to 2026.

Key elements driving this expected growth are an increasing amount and pace of investment in new treatments as well as increased demand as the global population of aged persons grows along with decreased immune system function.

Also, North America currently provides the highest demand by region, with Europe emerging as the second largest market in the years ahead

There are many firms developing CAR T approaches to cancer treatments, too many to list here, but they include major biopharma companies across the globe.

In addition, companies are developing gene therapy technologies and they include large pharma and small biopharma firms.

Management says its patent estate provides it with 'substantial intellectual property protection.'

Poseida’s recent financial results are typical of a clinical stage biopharma in that they have recorded no revenue but significant R&D and G&A costs associated with advancing their programs through development.

Below are the company’s financial results for the past two and ¼ years (Audited PCAOB for full years):

poseidapl

Source: Company registration statement

As of March 31, 2020, the company had $103.4 million in cash and $29.2 million in total debt. (Unaudited, interim)

Poseida intends to raise $115 million in gross proceeds from an IPO of its common stock, although the final amount may be different.

Management says it will use the net proceeds from the IPO for its co-lead drug programs, its ‘planned clinical development of P-BCMA-ALLO1 for relapsed/refractory multiple myeloma, including clinical trial costs and manufacturing expenses; and the remainder for developing our gene therapy and other CAR-T preclinical product candidates and research programs, as well as for 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, Piper Sandler and William Blair.

Commentary

Poseida is seeking an above-average IPO transaction size to fund development for its wide-ranging pipeline of drug programs.

The firm’s lead candidate is in Phase 1/2 trials and management expects a data update by the end of 2020 for its multiple myeloma trial and an update in early 2021 for its prostate trial.

The market opportunities for these cancer conditions are large and estimated to grow at a moderate rate of growth.

There is significant competition, however, especially in the CAR T treatment area and the genetic treatment approach has met with slow progress through FDA approval.

Management has disclosed no research or commercial collaborations to-date.

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 44.8% since their IPO. This is a top-tier performance for all major underwriters during the period.

Poseida is an ambitious firm seeking to treat a large number of cancer types. Its co-lead programs have shown promising safety and efficacy results in early stage trials to-date.

I’ll provide a final opinion when we learn more about the IPO from management.

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 incomplete or out of date, and does not constitute financial, legal, or investment advice.)

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