IN8bio (INAB) intends to raise $75 million from the sale of its common stock in an IPO, according to an amended registration statement.
The company is developing treatments for brain cancer and blood cancer.
INAB has much of its pipeline still in a preclinical stage of development, so the IPO may be more suited to institutional investors with long hold time horizons.
Company & Technology
New York, New York-based IN8bio was founded to advance a pipeline of treatment options for glioblastoma [GBM] and acute leukemia using ‘allogeneic, autologous and genetically modified gamma-delta T cells.’
The advantage of employing gamma-delta T cells is that they kill cancer cells ‘while possessing a tumor recognition mechanism that protects healthy tissue.’
Management is headed by co-founder, president, CEO and CFO William Ho, who was previously founder and Managing Partner at AlephPoint Capital, a healthcare venture capital firm.
Below is a brief overview video of glioblastoma:
The firm’s lead candidate, INB-200, is a Phase 1 stage candidate being tested for newly diagnosed GBM and in preclinical study in combination with checkpoint inhibitors.
Below is the current status of the company’s drug development pipeline:
Source: Company S-1 Filing
Investors in the firm have invested at least $14 million and include Bios Equity Partners and Emily Fairbairn.
Market & Competition
According to a 2018 market research report by GlobalData, the global market for glioblastoma treatment was an estimated $662 million in 2017 and is expected to reach $1.4 billion by 2027 in the eight major markets (7MM plus urban China).
This represents a forecast CAGR (Compound Annual Growth Rate) of 7.5% from 2018 to 2027
Survival rates from GBM are low and difficulties in developing new treatment include the inability of drugs to penetrate the blood brain barrier.
Also, currently the only approved targeted therapy is Roche’s Avastin for recurrent GBM.
Major competitive vendors that provide or are developing treatments include:
Adicet Bio (ACET)
American Gene Technologies International
Editas Medicine (EDIT)
Immatics Biotechnologies (IMTX)
IN8bio’s recent financial results are typical of a clinical stage biopharma in that they feature no revenue and significant R&D and G&A expenses associated with its pipeline development.
Below are the company’s financial results for the past two and ½ years (Audited PCAOB for full years):
Source: Company registration statement
As of June 30, 2020, the company had $3.2 million in cash and $2.8 million in total liabilities. (Unaudited, interim)
INAB intends to sell 4.7 million shares of common stock at a midpoint price of $16.00 per share for gross proceeds of approximately $75.0 million, not including the sale of customary underwriter options.
No existing shareholders have indicated an interest to purchase shares at the IPO price, a frequent feature of life science IPOs.
Assuming a successful IPO at the midpoint of the proposed price range, the company’s enterprise value at IPO would approximate $287.6 million.
Excluding effects of underwriter options and private placement shares or restricted stock, if any, the float to outstanding shares ratio will be approximately 24.12%.
Per the firm’s most recent regulatory filing, it plans to use the net proceeds as follows:
approximately $22 million to $28 million to advance the clinical development of INB-200, including the completion of our ongoing Phase 1 clinical trial and the initiation of a Phase 2 clinical trial for the treatment of newly diagnosed GBM, and for the evaluation of additional indications;
approximately $10 million to $17 million to advance the clinical development of INB-100, including the completion of our ongoing Phase 1 clinical trial and the initiation of a Phase 2 clinical trial for the treatment of leukemia patients undergoing HSCT;
approximately $10 million to $15 million to advance the clinical development of INB-400, including the IND submission and the initiation of a Phase 1 clinical trial for the treatment of newly diagnosed GBM;
the remainder to fund other research and development activities, including preclinical development, working capital and other general corporate purposes.
Management’s presentation of the company roadshow is available here.
Listed underwriters of the IPO are Barclays, Cantor and Mizuho Securities.
INAB is seeking public funding for its targeted pipeline of treatments for brain and blood cancers.
For its lead candidate, INB-200, there are three programs underway, with the next data readout expected for Phase 1 safety results sometime in 2021.
The market opportunities for treating glioblastoma and acute leukemia currently total about $5 billion in the aggregate and are expected to grow at moderate rates of growth over the near term.
Management has disclosed no collaborations with major pharma firms, so is pursuing a go-it-alone approach at this time.
As to valuation, the IPO’s pricing gives it a proposed enterprise value of about $288 million, at the lower end of the typical range for biopharma IPOs, so the valuation expectations appear reasonable.
While INAB is in early Phase 1 trials, we don’t have any idea of preliminary results so far.
Given that so much of its pipeline is in preclinical stage, the IPO may be more suited to institutional investors with long-term hold time horizons.
Expected IPO Pricing Date: November 11, 2020.
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.