Given the magnitude of the gains seen in prior pharmaceutical IPOs, it doesn’t come as a surprise that investors would have a strong interest in Arvinas' (ARVN) IPO this morning. ARVN has a couple other important factors working in its favor as well. Specifically, the company has potentially very lucrative collaboration agreements in place with Genentech and F. Hoffman-La Roche. In fact, ARVN says that it has the potential to receive up to $1.4 bln in milestone payments, plus royalty payments, if its products become marketable.
Additionally, this smaller 7.5 mln share deal (up-sized from 6.7 mln) was led by Goldman Sachs, Piper Jaffray, and Citigroup. Typically, tier one firms like Goldman Sachs gravitate to larger deals which will generate higher fees. The interest in the ARVN deal suggests that Goldman is bullish on its outlook.
Investors apparently agree as the 7.5 mln share deal priced at $16, the high end of the $14-$16 projected range, generating $120 mln in total gross proceeds. That's nearly 20% more than anticipated. Shares are set to open for trading later this morning on the Nasdaq.
Arvinas (ARVN) is a biopharmaceutical company focused on treating patients suffering from debilitating and life-threatening diseases through the discovery, development, and commercialization of therapies to degrade disease-causing proteins. The company uses its proprietary technology platform to engineer proteolysis targeting chimeras (PROTACs) that are designed to harness the body’s own natural protein disposal system to selectively and efficiently degrade and remove disease-causing proteins.
ARVN believes that its targeted protein degradation approach has advantages over existing modalities, including traditional small molecule therapies and gene-based medicines. Furthermore, the company believes that its small molecule PROTAC technology has the potential to address a broad range of intracellular disease targets, including those representing the up to 80% of proteins that cannot be addressed by existing small molecule therapies, commonly referred to as undruggable targets.
The company has developed a proprietary synthetic PROTAC matrix which, combined with biological and biophysical data, allows it to rapidly identify and optimize efficient protein degraders with features it believes can make for successful drugs. The modular design and holistic optimization of each PROTAC provides it with opportunities to prepare different chemical series, each with tunable properties relating to potency, selectivity and method of delivery, which can produce the efficient complex necessary for degradation of the targeted protein by the proteasome.
At the moment, ARVN is preparing to advance its lead product candidates, ARV-110 and ARV-471, into Phase 1 clinical trials. The company expects to initiate a Phase 1 clinical trial for ARV-110 in men with metastatic castration-resistant prostate cancer (mCRPC) in 1Q19 and a Phase 1 clinical trial for ARV-471 in women with metastatic ER positive/HER2 negative breast cancer, or ER+ breast cancer, in mid-2019. In its preclinical studies, these lead product candidates have demonstrated potent and selective protein degradation. ARVN believes favorable clinical trial results in these initial oncology programs would provide validation of its platform as a new therapeutic modality for the potential treatment of diseases caused by dysregulated intracellular proteins regardless of therapeutic area.
Additionally, ARVN is developing additional PROTACs capable of degrading androgen receptor protein (AR) and certain additional clinically relevant AR point mutations, which it refers to as its Next Generation Degrader program. It is developing a PROTAC that specifically targets the AR splice variant-7 (AR-V7) a truncated form of AR that lacks the ligand-binding domain necessary to bind with ARV-110. AR-V7 has been shown to correlate with a lack of response to current standard-of-care treatments for men with mCRPC.