With sickle cell disease study in sight, Graphite Bio draws up a $238M IPO


Graphite Bio’s technology precisely finds and replaces genes, offering potential cures for genetic diseases. The gene-editing biotech is preparing to bring its most advanced therapeutic candidate into human testing later this year and its IPO raised $238 million for that program and others in its pipeline.

South San Francisco-based Graphite initially planned to offer 12.5 million shares in the range of $15 and $17 each. Late Thursday, the biotech boosted the deal’s size to 14 million shares at the top of the projected price range. Graphite’s shares will trade on the Nasdaq under the stock symbol “GRPH.”

Two other biotechs priced nine-figure IPOs this week. See below for details about the stock market debuts of Elevation Oncology and Monte Rosa Therapeutics.

In Graphite’s IPO filing, the company said its platform technology builds on current gene-editing approaches to achieve “high efficiency targeted gene integration.” CRISPR technology finds the gene the biotech wants to fix, while a DNA repair mechanism called homology directed repair (HDR) replaces DNA in that target gene. The therapy is delivered to its destination via an engineered virus, adeno-associated virus type 6. Graphite aims to develop its technology for gene correction, gene replacement, or the targeted insertion of genes into chosen locations on the chromosome.

Gene correction is Graphite’s first test. The company’s lead program, GPH101, is a potential therapy for sickle cell disease, an inherited disorder stemming from a single mutation that causes red blood cells to become misshapen. With GPH101, Graphite aims to remove the mutation that causes the disease, replacing it with the natural genetic sequence. If it works, the therapy could restore normal expression of hemoglobin, the oxygen-carrying protein in red blood cells. In mouse studies, Graphite said that its approach significantly increased normal adult hemoglobin expression, extended the lifespan of red blood cell from two days to 19 days, and eliminated the sickling of those cells. The FDA has cleared Graphite’s plans for a Phase 1/2 study, which the company plans to start in the second half of this year. Preliminary proof-of-concept data are expected by the end of 2022.

The Graphite technology platform was licensed from Stanford University, where it was developed in the labs of the company’s scientific founders, Matthew Porteus and Maria Grazia Roncarolo. The startup launched last September with $45 million in funding led by Versant Ventures. According to the IPO filing, Graphite has raised $197.7 million, most recently a $150.7 million Series B round of funding in March. Versant remains the largest shareholder, owning 29.8% of the company after the IPO; Samsara BioCapital owns 12.7%; Porteus owns 6.5%.

According to the IPO filing, Graphite plans to spend $90 million on Phase 1/2 tests of GPH101 in sickle cell disease. The company has budgeted $40 million for the preclinical research of GPH201, potentially leading to the start of a Phase 1/2 study in X-linked severe combined immunodeficiency. Another $40 million is planned for the preclinical and potential clinical development of GPH301, a therapy for Gaucher disease. And $80 million is set aside for the company’s discovery-stage programs.

Elevation Oncology grabs $100M for targeted cancer drug

Cancer therapies are moving toward targeted treatments directed to certain genetic signatures on tumors. Elevation Oncology is one of a handful of companies developing drugs that target neuregulin-1 (NRG1) fusions. The company is conducting a potentially pivotal test of its lead drug candidate, and it raised $100 million from its IPO to fund that research.

New York-based Elevation offered 6.25 million shares at $16 apiece, which was the midpoint of its projected $15 to $17 per share price range. Elevation’s share will trade on the Nasdaq under the stock symbol “ELEV.”

NRG1 fusions are rare genomic alteration that drive cancer growth by activating HER3, which in turn triggers pathways for cell proliferation. Elevation’s drug candidate, seribantumab, is a monoclonal antibody that binds to the HER3 receptor, competing with NRG1 fusion proteins, the company said in its IPO filing. This approach is intended to prevent the HER3 signaling cascade believed to trigger the over activation of pathways sustaining tumors.

Seribantumab was acquired from Merrimack Pharmaceuticals, which had stopped its work on the drug after interim data in a mid-stage lung cancer study showed it did not improve how long patients live without the cancer progressing. Elevation is pursuing tumor-agnostic applications of the drug—treating any type of cancer as long as it has the NRG1 fusion. Seribantumab is currently in a Phase 2 clinical trial enrolling patients that have NRG1 fusion-driven solid tumors that have progressed after at least one earlier treatment. Interim data are expected in late 2021 or early 2022.

Since forming in 2019, Elevation says it has raised $97.4 million. Aisling Capital is Elevation’s largest shareholder, owning 11.6% of the biotech after the IPO, the prospectus shows. As of the end of the first quarter of this year, Elevation reported having $69.9 million in cash holdings. Combined with the IPO proceeds, the company plans to spend between $60 million and $70 million to advance seribantumab through the completion of a Phase 2 clinical trial that the company believes, if successful, may support the submission of an application seeking accelerated approval. The rest of the cash will fund further development of the drug pipeline. The company estimates that its capital will support the company into the second quarter of 2023.

“GLUE” sticks a $222.3M IPO for protein-degrading drugs

The field of protein degradation drugs is welcoming another publicly traded company with Monte Rosa Therapeutics’ $222.3 million IPO. The preclinical biotech had planned to sell 9.75 million shares in the range of $17 to $19 each. On Wednesday, it boosted the size of the deal to 11.7 million shares offered at the top of its projected price range. Those shares are trading on the Nasdaq under the stock symbol “GLUE.”

Cells have a built-in system for disposing of old or damaged proteins. Drugs that employ targeted protein degradation work by directing proteins associated with disease that disposal machinery, called the proteasome. The target protein is marked with a molecular tag that flags it for disposal. Not all proteins have binding sites for these molecules. Boston-based Monte Rosa aims to overcome that limitation with small molecules it calls “molecular glues.” In its prospectus, the company said its technology designs these molecular glue degraders, opening protein degradation to diseases previously deemed “undruggable.”

Monte Rosa’s most advanced program is developing small molecules that target a protein called GSPT1. According to the IPO filing, the company aims to treat cancers driven by Myc, a family of genes that have eluded drug hunters. GSPT1 plays a key role in protein synthesis. By degrading that protein, Monte Rosa aims to trigger the death of cancer cells. Lung cancer is the first target. The company aims to start the preclinical research leading up to the submission of an investigational new drug application (IND) in the second half of this year with a formal filing of that paperwork in the first half of next year.

Monte Rosa traces its origins to Ridgeline, a Versant Ventures incubator for drug discovery startups. Since its 2018 start, Monte Rosa has raised more than $220 million, most recently a $95 million Series C round of funding in March. Versant Ventures is Monte Rosa’s largest shareholder, owning 20.5% of the company after the IPO, according to the IPO filing. New Enterprise Associates owns a 15.6% post-IPO stake.

As of March 31, the company reported having $168.4 million in cash. That capital, along with the IPO proceeds will be applied to the development of the drug pipeline. The GSPT1 program will receive between $47 million and $57 million to advance through Phase 1/2 testing. An estimated $120 million to $130 million is planned for development of other discovery programs; the company aims to bring a second program through Phase 1 testing; a third one through the filing of an IND; and a fourth into IND-enabling research. Monte Rosa estimates that the company will have enough money to fund operations into the third quarter of 2024.

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