IPO Preview: Repare Therapeutics Starts U.S. IPO Plan

IPOStreet

Repare Therapeutics (RPTX) intends to raise $100 million in an IPO of its common stock, according to an S-1 registration statement.

The firm is developing synthetic lethality approaches to cancer therapies.

RPTX has a promising collaboration with Bristol-Myers Squibb to use its SNIPRx platform for drug discovery purposes.

I’ll provide an update when we learn more about the IPO from management.

Cambridge, Massachusetts-based Repare was founded to develop its SNIPRx platform 'to systematically discover and develop highly targeted cancer therapies focused on genomic instability, including DNA damage repair.'

Management is led by president and CEO Lloyd Segal, who has been with the firm since 2016 and was previously a Managing Partner at Persistence Capital Partners, a Canadian venture capital firm and has served as CEO of several emerging biotechnology companies.

Below is a brief overview video of Repare Therapeutics:

Source: Montreal InVivo

The firm's lead candidate is RP-3500, an oral small molecule 'inhibitor for the treatment of solid tumors with specific DNA damage repair-related genomic alterations.'

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

reparepipe

Source: Company S-1 Filing

Investors in the firm have invested at least $136 million and include Versant Ventures, MPM Capital, OrbiMed, UBS Oncology, Cowen, and Redmile.

According to a 2019 market research report by ResearchAndMarkets, the global market for solid tumor treatments is expected to reach $424.6 billion by 2027.

This represents a forecast CAGR (Compound Annual Growth Rate) of CAGR of 15.0% from 2019 to 2027.

Key elements driving this expected growth are an aging global population, an increase in breast cancer incidence and increasing options as to treatment modalities in developed economies and new drug adoption in emerging economies.

North America accounts for 33.6% of solid tumor treatment demand, followed by Europe at 30.2% and the Asia Pacific region at 19.5%.

Major competitive vendors that provide or are developing treatments include:

  • AstraZeneca (AZN)
  • Loxo Oncology (LOXO)
  • Blueprint Medicines (BPMC)
  • Agios Pharmaceuticals (AGIO)
  • SpringWorks Therapeutics (SWTX)
  • Black Diamond Therapeutics (BDTX)
  • Deciphera Pharmaceuticals (DCPH)
  • Turning Point Therapeutics (TPTX)

Repare’s recent financial results are atypical of a clinical stage biopharma in that they feature some revenue; the firm had significant R&D and G&A expenses associated with advancing its pipeline through clinical trials.

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

reparepl

Source: Company registration statement

As of March 31, 2020, the company had $83.7 million in cash and $15.7 million in total liabilities. (Unaudited, interim)

Repare intends to raise $100 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 I would expect to see this element in a future filing.

Management says it will use the net proceeds from the IPO to advance clinical development of its lead candidate, RP-3500, to fund continued development of its preclinical programs and to fund working capital and other general corporate purposes.

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

Listed bookrunners of the IPO are Morgan Stanley, Goldman Sachs, Cowen and Piper Sandler.

Commentary

Repare is seeking public capital market funding for its very early stage pipeline of drug candidates.

The firm’s lead candidate is preparing to enter Phase 1 safety trials sometime in the second half of 2020, if there are no Covid19 delays.

The global market opportunity for treatments for solid tumors is enormous, but there are also numerous treatments and competitors seeking to provide treatment options in this large market.

In May 2020, the firm entered into a collaboration deal with Bristol-Myers Squibb (BMY) to develop treatments for cancer using its SNIPRx platform to screen for potential targets.

BMY made a $50 million upfront payment and invested $15 million in the firm. Repare has the ultimate potential to receive up to $3.0 billion in ‘total milestones across all potential programs.’ Each program can pay up to $301 million in success-based milestone payments.

Morgan Stanley is the lead left underwriter and IPOs led by the firm over the last 12-month period have generated an average return of 46.3% since their IPO. This is a top-tier performance for all major underwriters during the period.

Repare is very early stage but has an impressive collaboration with BMY which could pay off handsomely if the firm is successful at identifying quality targets.

When we learn more about the IPO’s pricing and valuation assumptions, I’ll provide a final opinion.

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. 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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