Within the IPO market, the healthcare sector remains a hot spot. In fact, so far in 2019, 45% of all IPOs have been healthcare related, by far the largest contributor. The next closest is technology at 25%.
Within the healthcare sector, the gene therapy space has been mixed recently in terms of IPO performance.
On the positive side, Turning Point Therapeutics (TPTX), which launched its IPO in mid-April, is up 142% versus its IPO price. Rewinding a little further, Twist Bioscience (TWST) has jumped higher by 96% from its October 2018 IPO.
However, there have been a few duds as well. Precision BioSciences (DTIL) is trading about 25% below its IPO price and Orchard Therapeutics (ORTX) is down about 15%.
As for STOK, demand was clearly healthy in the primary market as its deal generated $142 mln in total gross proceeds, about 41% more than anticipated. Whether that carries over to the public market remains to be seen as shares are set to open for trading later this morning on the Nasdaq.
The lead underwriters on the IPO were JP Morgan, Cowen, and Credit Suisse.
STOK believes it is pioneering a new way to treat the underlying causes of severe genetic diseases by precisely up-regulating protein expression.
More specifically, it is developing novel antisense oligonucleotide (ASO) medicines that target ribonucleic acid (RNA) and modulate precursor-messenger RNA (pre-mRNA) splicing to up-regulate protein expression where needed and with appropriate specificity to near normal levels.
STOK utilizes its proprietary technology platform, Targeted Augmentation of Nuclear Gene Output (TANGO) to design ASOs to up-regulate the expression of protein by individual genes in a patient. Its approach is designed to allow it to deliver in a highly precise, durable and controlled manner disease-modifying therapies to a broad range of relevant tissues, including the central nervous system, eye, kidney and liver.
The company designed its lead product candidate, STK-001, to treat Dravet syndrome, a severe and progressive genetic epilepsy. With a well-defined patient population based on routine genetic testing and learnings from recently approved drugs for the treatment of Dravet syndrome to inform the clinical and regulatory pathways for STK-001, STOK anticipates an efficient clinical program.
It plans to submit an investigational new drug application for STK-001 by early 2020 and expects to initiate a Phase 1/2 clinical trial in 1H20.
Additionally, STOK intends to nominate a second candidate to treat an additional genetic disease for preclinical development by 1H20.
As a clinical stage company, STOK has not generated any revenue, nor does it expect to in the near future.
For the three months ended March 31, 2019, it has a loss from operations of ($6.3) mln compared to ($1.9) mln in the year ago period. The larger loss was due to its R&D expenses ramping higher by 228% to $4.1 mln.
As of March 31, it had cash and equivalents of $190.1 mln, on a pro forma basis. STOK believes that the net proceeds from this offering, together with its existing cash, cash equivalents and restricted cash will enable it to fund its operating expenses and capital expenditure requirements through the end of 2022.
As of March 31, 2019, it has raised over $130 mln in funding from two financing rounds, including investments from Apple Tree Partners, RTW Investments, RA Capital Management, Cormorant Asset Management, Perceptive Advisors and funds managed by Janus Henderson Investors, Redmile Group, Sphera Funds Management and Alexandria Venture Investments.