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Centessa Pharma’s IPO brings in $330M for its new model of drug R&D

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Centessa Pharmaceuticals, a young company with a goal of reinventing the traditional business model of drug research and development, has raised $330 million from its IPO to carry out its strategy.

Cheshire, U.K.-based Centessa initially planned to offer 15 million American depositary shares in the range of $18 to $20 per share. The company boosted the offering’s size to 16.5 million shares, which it priced at the top of the targeted price range. Those shares began trading Friday on the Nasdaq under the stock symbol “CNTA.”

Centessa is a holding company that houses drug development subsidiaries. The firm formed in February, backed by $250 million in funding raised to support development of a pipeline assembled by merging 10 privately held biotech startups. Those subsidiaries operate separately, focusing on their respective drug programs yet sharing in centralized infrastructure, such as manufacturing and regulatory support, provided by Centessa. This approach is intended to improve the speed and efficiency of drug development.

Medixci, a life sciences investment firm, founded Centessa. The 10 subsidiaries that operate under the Centessa umbrella are all from Medixci’s portfolio. This approach of providing resources shared by subsidiaries has precedent. BridgeBio Pharma, Cullinan Oncology, and Roivant Sciences operate in a similar way, though Roivant’s plans to go public revealed a shift away from that strategy.

In total, the 10 Centessa subsidiaries have 16 programs, four of which have reached clinical development, according to the IPO filing. The most advanced program is lixivaptan, a small molecule that Centessa subsidiary Palladio Biosciences has advanced to late-stage clinical development as a treatment for autosomal dominant polycystic kidney disease. The rare, inherited disorder can lead to kidney failure. Palladio is preparing to advance the drug to a global Phase 3 study, which it expects to begin in the first half of next year.

Of all the programs under the Centessa umbrella, lixivaptan will receive the largest share of the IPO proceeds and the company’s cash holdings. According to the prospectus, $110 million is planned for continuing the Phase 3 safety study of the drug, and for starting the pivotal Phase 3 study that could support a regulatory filing.

The other three clinical-stage programs in the Centessa pipeline will be supported by $155 million. Centessa plans to deploy another $200 million to continue development of the preclinical assets from the company’s other subsidiaries. Those programs span therapeutic areas that include hematology, cancer, immunology, and neuroscience. The IPO filing also states that Centessa may use some of its capital to acquire new programs, though the company added that it does not currently have an acquisition or licensing deals lined up.

Medixci is Centessa’s largest shareholder, owning a 19.9% post-IPO stake, according to the prospectus. Index Ventures owns 11.5%; General Atlantic owns 9.4%.

Though Centessa has a corporate office in the U.K., employees have been working virtually during the pandemic. The company said in its IPO filing that it plans to establish headquarters in Cambridge, Massachusetts once it is able to find space.

$DAWN for Day One Biopharmaceuticals

Day One Biopharmaceuticals, which takes its name from the “day one” talk physicians have with patients and families about a cancer diagnosis and treatment plan, raised $160 million to continue clinical development of its drugs for pediatric cancers. The South San Francisco-based biotech priced its offering of 10 million shares at $16 apiece, the top end of its projected price range. Day One’s shares trade on the Nasdaq under the stock symbol “DAWN.”

The most advanced Day One drug candidate, DAY101, is a small molecule designed to block multiple forms of RAF, a protein that drives the growth of cancer cells. The drug also blocks RAF variants. The company is developing the drug as a treatment for progressive low-grade glioma (pLGG), a brain tumor diagnosed in children that has no FDA approved therapies and no standard of care.

In Phase 1 testing, Day One reported that the drug showed evidence of rapid anti-tumor activity. The company has advanced the drug to a pivotal Phase 2 test in children with relapsed or pLGG. Initial data from this study are expected in the first half of 2022, according to the prospectus.

Day One’s second drug candidate, pimasertib, is a small molecule that blocks mitogen-activated protein kinase kinases 1 and 2 (MEK), a key signaling node in the MAPK, a signaling pathway that is associated with many types of cancer. The company expects to start a Phase 1b/2 trial in the first quarter of next year, which will study the combination of pimasertib and DAY 101 in patients age 12 and older with various MAPK-altered tumors.

Since Day One’s formation in 2018, the company has raised about $188 million, according to the prospectus. The company has used that cash to acquire the assets in its pipeline. DAY 101 was licensed from Takeda Pharmaceutical in 2019; pimasertib was licensed from Merck KGaA in February. Prior to the IPO, the most recent financing was a $130 million Series B funding in February led by RA Capital Management. Day One’s largest shareholder is Canaan with a 17.8% post-IPO stake, according to the prospectus.
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With the IPO proceeds, Day One plans to apply between $80 million and $100 million toward Phase 2 testing of DAY101 as a monotherapy in children with pLGG. The cash will also support Phase 3 testing of the drug as a first-line treatment for that cancer, as well as Phase 2 tests in adults with tumors characterized by RAS or RAF alterations.

Another $20 million to $40 million is planned for the Phase 1b/2 clinical trial evaluating pimasertib in adults with MAPK-altered solid tumors. The remaining cash will be used for acquiring preclinical and clinical-stage programs and continuing their development. Day one estimates that the IPO proceeds combined with its existing cash holdings should support operations for at least the next two years.

Singular Genomics upsizes IPO, raising $224M

Singular Genomics, a company that is developing new genomics tools and technologies, raised $224.4 million in its stock market debut. The La Jolla, California-based company initially planned to offer 8.5 million shares in the range of $20 to $22 each. Singular Genomics boosted the deal size to 10.2 million shares which priced at the top of its projected price range. Those shares trade on the Nasdaq under the stock symbol “OMIC.”

The Singular Genomics next generation sequencing technology is called Sequencing Engine. That platform is the basis for G4, an instrument and consumable kits for next generation sequencing. The G4 instrument is a benchtop next generation sequencer designed to for applications that include oncology and immune profiling. A beta pilot program has been completed and a commercial launch is expected by the end of this year, followed by an early access program, according to the prospectus.

The next product in development is PX Integrated Solution, a “multiomics” platform designed for use in single cell analysis, spatial analysis, and proteomics. The company said in the prospectus that technology will provide a high-resolution view of biology at the single cell and tissue level, with an initial focus on applications in oncology and immunology. Expansion could take PX into areas such as neurology. Singular Genomics is currently developing a prototype. An early access program is expected to begin next year, followed by a commercial launch in 2023.

According to the IPO filing, Singular Genomics plans to spend $53 million to fund development and commercialization of G4 Integrated Solution. Another $50 million will go toward product development and commercialization of PX Integrated Solution.

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