Yesterday, Forty Seven (FTSV 16.00, 0.00) priced an
upsized 7.04-mln share offering (increased from 6.70 mln shares) at $16.00,
which was at the top end of the expected pricing range of $14.00 to $16.00. The
stock will begin trading on the Nasdaq today.
Forty Seven is a California-based clinical-stage immuno-oncology company that aims to develop checkpoint therapies that activate macrophages to fight cancer. The company believes its main product candidate—5F9—can block a key signaling molecule known as CD47, making tumors susceptible to macrophages.
The company believes 5F9 could be used by itself or with other cancer therapies to transform the treatment of cancer. The experimental treatment has shown promise in six Phase 1b/2 clinical trials, which have included over 190 relapsed or refractory cancer patients with solid or hematologic tumors. The company owns global rights to all of its product candidates.
The lead product candidate—5F9—is a humanized IgG4 subclass monoclonal antibody against CD47, which interferes with recognition of CD47 by the SIRP receptor on macrophages. The design and dosing regimen overcome toxicity limitations of previously-tested anti-CD47 therapies developed by other companies. The product candidate has been well tolerated in trial subjects with side effects limited to reversible anemia, infusion reactions, headache, fatigue, chills, fever, and nausea. These side effects have reportedly been mild to moderate in severity.
At this time, there are no approved therapies that target the CD47 checkpoint of the innate immune system. The company notes that the approach is similar to T cell checkpoint inhibitors, which have been the frontline approach for certain cancer cases. It is estimated that more than $9 bln has been generated from T cell checkpoint inhibitor sales in 2017.
The company is investigating three types of CD47 therapy: monotherapy, therapy in combination with therapeutic antibodies, and therapy in combination with T cell checkpoint inhibitors in solid and hematological cancers.
Forty Seven is conducting clinical trials with Merck on the combination of 5F9 with BAVENCIO in ovarian cancer patients while another trial is being conducted with Gentech on the combination of 5F9 and TECENTRIQ in patients with bladder cancer and in patients with AML.
The company's second product candidate, FSI-189, for use with solid tumors, is in the preclinical development stage.
Forty Seven was founded by Stanford University scientists. Co-founder Irv Weissman uncovered the fundamental role of CD47 in immune regulation, applying his findings to the field of immuno-oncology. The company's executive team has broad industry experience in biologics and other therapeutics.
The company's strategy is predicated on maximizing the therapeutic and commercial potential of 5F9 and the pursuit of collaborative relationships and in-licensing to help advance and expand its product candidate portfolio.
The company plans to use between $23 mln and $25 mln to further the development of 5F9 through completion of the existing Phase I monotherapy and planned PD-L1 combination clinical trials.
Approximately $37 mln to $40 mln will be used to advance 5F9 through completion of Phase II combination trials or alternative Phase II indications if compelling clinical data avails itself. Between $4 mln and $5 mln will be used to further the development of the company's anti-SIRP alpha antibody product candidate—FSI-189—through IND-enabling studies.
Forty Seven plans to use $6 mln for upfront fees to license intellectual property while the remaining proceeds will be used for research and drug discovery activities, working capital, and general corporate purposes.
The company has no history of revenue generation. In 2017, Forty Seven used $37.17 mln for Research & Development, up 157.1% from $14.46 mln used in 2016. Total operating expenses grew 130.9% to $45.30 mln. Working capital increased to $81.29 mln from $9.69 mln in 2016.
The company used $36.94 mln for operating activities in 2017 after using $21.82 mln in 2016.
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