Whether or not a mind most cancers drug enters the physique by a needle within the arm or swallowed by mouth, the blood-brain barrier stands as a formidable final impediment on the remedy’s journey to its vacation spot. NeOnc Applied sciences navigates round this protecting barrier utilizing medication inhaled by the nostril. With a lead program in mid-stage scientific testing, NeOnc is now getting ready to take itself public.
Although some latest indicators level to enhancing IPO situations, the IPO window has been principally closed to biotech corporations the previous two years, which NeOnc is aware of firsthand. After laying groundwork for a standard IPO earlier this yr, the Westlake Village, California-based agency withdrew its registration assertion amid lukewarm investor curiosity. NeOnc is altering course. Simply as its drug takes an alternate path to the mind, the corporate is pursuing an alternate method of going public: a direct itemizing. Executives say they count on to file new securities paperwork this month.
NeOnc is searching for investor buy-in for its novel strategy to treating aggressive mind cancers, akin to glioblastoma. The usual of care consists of surgical procedure, chemotherapy, and radiation. If the most cancers advances, the usual drug remedy is temozolomide, model identify Temodar, a Merck chemotherapy in oral and injectable formulations that was initially authorized in 1999. In keeping with NeOnc CEO Thomas Chen, a neurosurgeon and professor of neurological surgical procedure on the College of Southern California’s Keck College of Medication, the problem for the Merck drug is getting sufficient of it by the blood-brain barrier to succeed in tumors.
There’s precedent for intranasal drug supply to hit central nervous system targets. Some migraine medication work this fashion. NeOnc’s drug, NEO100, leverages cranial nerves within the mind, Chen stated. Whereas these nerves play a job in our senses, together with odor and style, they will additionally transport medication throughout the blood mind barrier.
“We would like our drug to get to the goal, however as a substitute of attempting to open up or break by the blood-brain barrier, we’re attempting to bypass it,” Chen stated.
The Thought for Intranasal Drug Supply to the Mind
The energetic pharmaceutical ingredient in NEO100 is perillyl alcohol (POH), a naturally occurring compound remoted from important oils of sure crops. Whereas POH is an ingredient in widespread client objects akin to cosmetics and cleansing merchandise, lab exams have additionally proven it interferes with the replication of dividing most cancers cells, Chen stated. Nonetheless, tutorial analysis testing oral POH discovered not sufficient of the compound reached the bloodstream to confer a therapeutic impact. Growing the dose led to insupportable gastrointestinal negative effects.
Chen stated the concept for delivering POH by the nostril got here from a NeOnc co-founder, a neurosurgeon who had success testing intranasal supply of the compound in Brazil. NeOnc’s mental property is expertise licensed from USC that permits the corporate to make ultra-pure, pharmaceutical-grade POH. The drug is run with a commercially out there nebulizer.
In NeOnc’s Section 1 dose-escalation examine testing NEO100 in 12 glioblastoma sufferers, revealed outcomes confirmed the drug was protected and effectively tolerated. This trial was not powered to display efficacy, however Chen famous three sufferers lived greater than three years and one remains to be alive. For context, glioblastoma sufferers whose illness has returned after a number of rounds of ordinary remedy dwell a median of six months. A genomic evaluation of tumors discovered higher responses in these with a selected genetic signature, a mutation to IDH1 enzymes. IDH1 has validation with the latest FDA approval of the first systemic mind most cancers remedy for that focus on, a tablet from Servier Prescription drugs. NeOnc’s ongoing Section 2a check is recruiting sufferers with IDH1 mutations.
When NeOnc set preliminary IPO phrases this previous winter, it aimed to lift about $75 million. NeOnc’s largest shareholder is AFH, a biotech-focused household workplace. Amir Heshmatpour, managing director of AFH and govt chairman of NeOnc’s board of administrators, stated institutional buyers didn’t heat to NeOnc, telling him they like corporations be in late-stage testing or no less than have Section 2 knowledge.
“Institutional buyers have pulled again within the final 5 years,” Heshmatpour stated. “They need you to de-risk the lead asset as quick as doable with as little cash as doable.”
A Uncommon Path to the Public Markets
NeOnc withdrew its registration assertion in June, then raised $18.5 million, a mixture of fairness financing and the conversion of debt into fairness. The corporate additionally acknowledged its intention to go public by way of a direct itemizing. Whereas an IPO raises new capital by issuing new shares offered to the general public, a direct itemizing includes no new shares and raises no new cash, stated Taylor Wirth, a associate at Barnes & Thornburg who focuses on securities transactions. As an alternative, firm insiders promote their shares to the general public with out involving underwriters, defined Wirth, who has no connection to NeOnc. With no new shares supplied, current shareholders expertise no dilution. Going public this fashion can also be cheaper than an IPO as a result of an organization avoids paying underwriting charges.
Music-streaming firm Spotify, which went public in 2018, may be essentially the most outstanding direct itemizing instance. The direct itemizing pattern peaked in 2021, when six U.S. corporations went public this fashion, in response to PitchBook. From 2018 to mid-2023, the newest figures out there from PitchBook, 14 U.S. corporations went public by way of a direct itemizing — none within the life sciences. There’s been no less than one biotech direct itemizing this yr. FibroBiologics, a regenerative medication firm in early-stage scientific growth, accomplished its direct itemizing in January.
Direct listings are significantly uncommon for biotech, Wirth stated. One cause is that drug growth is R&D intensive and corporations on this sector want substantial sums of recent cash to finance that work. The advantages of a direct itemizing are clearer for well-capitalized corporations that don’t want further money, Wirth stated.
“I feel the unique considering across the direct itemizing is you possibly can minimize out the center man, minimize out the underwriter, and democratize the method of going public,” he stated. “However folks discovered companies of underwriters are extraordinarily useful advertising and marketing shares, putting them with buyers. Going public is a fancy authorized and enterprise course of. Underwriters are useful navigating these waters.”
The biotech IPO market is exhibiting new indicators of life. BioAge Labs, a metabolic diseases-focused firm collaborating with Eli Lilly, filed its registration assertion final week. Two clinical-stage builders of bispecific antibody medication, Zenas Biopharma and Bicara Therapeutics, have every set monetary phrases for IPOs anticipated to cost this week.
If NeOnc is ready to be a part of these corporations on the general public markets, it goals to proceed work on different applications that use NEO100 as a option to ship different therapies into the mind. NEO212 is comprised of NEO100 conjugated to Merck’s glioblastoma drug. The corporate additionally has preclinical analysis testing NEO100 as a option to ship the Parkinson’s illness drug levadopa to the mind. However NeOnc’s near-term focus is glioblastoma. Chen expects the Section 2a check of NEO100 will attain its focused enrollment of 25 sufferers by the tip of 2024; preliminary knowledge might are available mid-2025.
Picture: Jolygon, Getty Photographs
