IPO Preview: Audeo Oncology

| About: Audeo Oncology (AURX)

Based in San Francisco, CA, Audeo Oncology (AURX) scheduled a $50 million IPO with a market capitalization of $163 million at a price range mid-point of $15, for Friday December 14, 2012.

Five other IPOs Scheduled For Week Of December 10th. The full IPO calendar is available here.

S-1 filed November 15, 2012.

Manager/Joint Managers: Leerink Swann/ Oppenheimer.

AURX is a development stage biopharmaceutical company which needs money to start a stage three clinical trial.

There have been very few drugs coming to market in the last 10 to 15 years. The chances of success are not high. IPOdesktop therefore would pass on the AURX IPO, partially because it is in the early phase of a stage 3 clinical trial.

AURX is a late stage biopharmaceutical company primarily focused on utilizing its Hyaluronic Acid Chemotransport Technology, or HyACT, to target cancer drugs preferentially to tumor cells to enhance drug activity. HyACT is a flexible platform technology designed to increase the effectiveness of anti-cancer agents without increasing treatment toxicity.

AURS seeks to reduce the risks related to drug development by using known anti-cancer drugs, and aim to enhance their commercial value by improving their effectiveness.

AURX's lead HyACT product candidate, HA-Irinotecan, is currently in a pivotal Phase III clinical trial for metastatic colorectal cancer, or mCRC, meaning that AURX intends to use the data collected from the clinical trial to seek regulatory approval from the U.S. Food and Drug Administration, or FDA, and the European Medicines Agency, or EMA, of HA-Irinotecan for the treatment of mCRC. HA-Irinotecan is also in an investigator-sponsored Phase II clinical trial for small cell lung cancer, or SCLC.

AURX's independent public accounting firm identified a material weakness in internal control over financial reporting. AURX has not yet been able to remediate this material weakness.

AURX expects to net $42 million from its IPO.

Proceeds are allocated as follows:

$21.0 million to complete a pivotal Phase III clinical trial and related regulatory filings for HA-Irinotecan for the treatment of mCRC;

$6.6 million to prepare for commercial-scale manufacturing of HA-Irinotecan, if approved for the treatment of mCRC, which would entail procurement of key raw materials, developing and validating a manufacturing process to manufacture commercial-scale quantities of product and preparing and filing regulatory documents;

$3.9 million to fund research and development activities related to ther HyACT platform;

$3.8 million to fund research and drug discovery activities related to in-licensed VAST drug discovery technology; and

the balance for general corporate purposes, including working capital and capital expenditures.

Disclosure: I 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. I have no business relationship with any company whose stock is mentioned in this article.