Whether or not a mind most cancers drug enters the physique via 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 via the nostril. With a lead program in mid-stage medical testing, NeOnc is now making ready to take itself public.
Although some current indicators level to bettering IPO circumstances, the IPO window has been largely closed to biotech corporations the previous two years, which NeOnc is aware of firsthand. After laying groundwork for a conventional IPO earlier this 12 months, 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 approach 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 method to treating aggressive mind cancers, corresponding to glioblastoma. The usual of care contains surgical procedure, chemotherapy, and radiation. If the most cancers advances, the usual drug remedy is temozolomide, model title Temodar, a Merck chemotherapy in oral and injectable formulations that was initially accredited in 1999. In response to NeOnc CEO Thomas Chen, a neurosurgeon and professor of neurological surgical procedure on the College of Southern California’s Keck College of Drugs, the problem for the Merck drug is getting sufficient of it via the blood-brain barrier to achieve 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 mentioned. Whereas these nerves play a task in our senses, together with scent and style, they’ll additionally transport medication throughout the blood mind barrier.
“We would like our drug to get to the goal, however as a substitute of making an attempt to open up or break via the blood-brain barrier, we’re making an attempt to bypass it,” Chen mentioned.
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 vegetation. Whereas POH is an ingredient in widespread client objects corresponding to cosmetics and cleansing merchandise, lab checks have additionally proven it interferes with the replication of dividing most cancers cells, Chen mentioned. Nonetheless, educational 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 unintended effects.
Chen mentioned the concept for delivering POH via 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 accessible nebulizer.
In NeOnc’s Part 1 dose-escalation research testing NEO100 in 12 glioblastoma sufferers, printed outcomes confirmed the drug was secure and properly tolerated. This trial was not powered to exhibit 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 mean of six months. A genomic evaluation of tumors discovered higher responses in these with a particular genetic signature, a mutation to IDH1 enzymes. IDH1 has validation with the current FDA approval of the primary systemic mind most cancers remedy for that concentrate on, a tablet from Servier Prescribed drugs. NeOnc’s ongoing Part 2a take a look at is recruiting sufferers with IDH1 mutations.
When NeOnc set preliminary IPO phrases this previous winter, it aimed to boost about $75 million. NeOnc’s largest shareholder is AFH, a biotech-focused household workplace. Amir Heshmatpour, managing director of AFH and government chairman of NeOnc’s board of administrators, mentioned institutional traders didn’t heat to NeOnc, telling him they like corporations be in late-stage testing or not less than have Part 2 information.
“Institutional traders have pulled again within the final 5 years,” Heshmatpour mentioned. “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 mix of fairness financing and the conversion of debt into fairness. The corporate additionally said 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 entails no new shares and raises no new cash, mentioned Taylor Wirth, a associate at Barnes & Thornburg who makes a speciality of securities transactions. As a substitute, 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 provided, present 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, is likely to be probably the most outstanding direct itemizing instance. The direct itemizing development peaked in 2021, when six U.S. corporations went public this fashion, based on PitchBook. From 2018 to mid-2023, the latest figures accessible from PitchBook, 14 U.S. corporations went public by way of a direct itemizing — none within the life sciences. There’s been not less than one biotech direct itemizing this 12 months. FibroBiologics, a regenerative medication firm in early-stage medical improvement, accomplished its direct itemizing in January.
Direct listings are significantly uncommon for biotech, Wirth mentioned. One cause is that drug improvement 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 mentioned.
“I believe the unique pondering across the direct itemizing is you could possibly lower out the center man, lower out the underwriter, and democratize the method of going public,” he mentioned. “However individuals discovered companies of underwriters are extraordinarily useful advertising shares, inserting them with traders. Going public is a fancy authorized and enterprise course of. Underwriters are useful navigating these waters.”
The biotech IPO market is displaying 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 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 Part 2a take a look at of NEO100 will attain its focused enrollment of 25 sufferers by the tip of 2024; preliminary information may are available mid-2025.
Picture: Jolygon, Getty Photographs
