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Based in New York, N.Y., Stemline Therapeutics (NASDAQ:STML) scheduled a $25 million IPO with a market capitalization of $65 million at a price range mid-point of $11 for Tuesday, Jan. 29, 2013. STML had scheduled pricing dates in both July and August before ultimately delaying its offering.

The recent S-1 was filed Jan. 8, 2013.

Summary

STML is a clinical-stage biopharmaceutical company focused on discovering, acquiring, developing, and commercializing proprietary therapeutics that target both cancer stem cells, or CSCs, and tumor bulk. STML made stunning pre-clinical results in two patients (see below). STML is now planning clinical trials funded from IPO proceeds.

According to the S-1 (page 1):

In completed Phase I/II clinical trials, both SL-401 and SL-701 have demonstrated single agent activity (activity as a stand-alone therapy), including instances of durable complete responses, or CRs, which is the disappearance of all signs of cancer in response to treatment.

Conclusion

If the results discussed below under "First Patient" and "Second Patient" can in fact be duplicated in clinical trials, then STML is going to be a very big stock. If not, then STML will likely run out of money and go bankrupt unless it can sell to a strategic partner.

For the few investors who like this kind of risk, STML could be very rewarding.

Business

STML is a clinical-stage biopharmaceutical company focused on discovering, acquiring, developing, and commercializing proprietary therapeutics that target both cancer stem cells, or CSCs, and tumor bulk. STML believes that it is developing the most clinically advanced pipeline of anti-CSC therapeutics and that STML holds a broad portfolio of CSC-focused intellectual property, establishing STML as a leader in the CSC field.

Among the therapeutic candidates in its portfolio, STML is currently developing two clinical-stage product candidates, SL-401 and SL-701, for which STML holds global marketing rights. The lead indications for SL-401, a biologic targeted therapy, are blastic plasmacytoid dendritic cell neoplasm, or BPDCN, a rare hematologic cancer, and acute myeloid leukemia, or AML.

The lead indications for SL-701, a therapeutic cancer vaccine comprised of synthetic peptides, are pediatric and adult brain cancer. In completed Phase I/II clinical trials, both SL-401 and SL-701 demonstrated single agent activity, including durable complete responses, or CRs, and longer overall survival, or OS, for patients compared with that achieved in the past with traditional therapies

Results Announced at Annual Conference

In December 2012, new trial results from the multi-center SL-401 Phase I/II clinical trial of patients with advanced hematologic cancers, which STML refers to as the 401 AHC Study, were announced at the American Society of Hematology 54th Annual Conference. Specifically, SL-401 induced two new complete responses, or CRs, in patients with heavily pre-treated relapsed or refractory blastic plasmacytoid dendritic cell neoplasm, or BPDCN.

BPDCN is an uncommon and aggressive hematologic cancer that carries a poor prognosis. BPDCN is an orphan disease for which there is no approved or standard treatment. Notably, BPDCN expresses high levels of the interleukin-3 receptor, or IL-3R, the target of SL-401. SL-401 had previously been shown to possess potent anti-BPDCN activity in preclinical models.

Two Patients

The two BPDCN patients who experienced CRs following SL-401 treatment had previously failed two and three intensive regimens of multi-agent chemotherapy, respectively, before being treated with SL-401.

First Patient

The first BPDCN patient was third-line, having received two prior intensive treatment regimens including high-dose chemotherapy and bone marrow transplantation. Following treatment with only a single cycle of SL-401, the patient's leukemic blasts, which had been in the bone marrow and bloodstream before treatment, were no longer detectable.

Additionally, the patient's peripheral blood counts normalized. Furthermore, the patient's enlarged spleen and lymph nodes, due to infiltration by malignant cells, also normalized. This Complete Response (CR) is ongoing and currently exceeds four months.

Second Patient

The second BPDCN patient was fourth-line, having previously been treated with three intensive regimens of chemotherapy, including bone marrow transplantation. The patient had malignant disease involving the skin and bone marrow, resulting in multiple cutaneous lesions and low blood counts.

Following treatment with only a single cycle of SL-401, the patient achieved a CR with no evidence of BPDCN in the skin, bone marrow, or bloodstream. In addition, the patient's blood cell counts returned to normal levels and no serious side effects were observed. This Complete Response is ongoing and currently exceeds two months.

Trial

STML plans to complete a pivotal Phase IIb single-arm trial of SL-401 in patients with relapsed or refractory BPDCN, with overall response rate as the primary endpoint, and STML plans to seek Orphan Drug designation from the FDA for SL-401 in the treatment of BPDCN. STML believes that a registration path based on a relatively small single-arm trial with a surrogate endpoint can be pursued to potentially obtain accelerated approval of SL-401 in BPDCN.

Strategy

  • Be the first anti-Cancer Stem Cell focused company to commercialize a CSC-directed oncology drug. As the most clinically advanced anti-CSC-focused company, STML aims to fortify its leadership position and be the first to commercialize a CSC-directed oncology drug.
  • Develop and commercialize SL-401 in multiple hematological cancers. STML plans to complete a pivotal Phase IIb single-arm trial of SL-401 in patients with relapsed or refractory BPDCN, with overall response rate as the primary endpoint.

STML also plans to advance SL-401 into a registration-directed randomized Phase IIb clinical trial with CR rate and OS as co-primary endpoints to treat adult AML patients as a third-line treatment. BPDCN and AML each represent an unmet medical need. The SL-401 target, IL-3R, is expressed on a wide variety of hematologic cancers including AML, CML, MDS, and acute lymphoid leukemia, as well as lymphomas, such as Hodgkin's disease, BPDCN, and multiple myeloma.

Accordingly, STML believes that SL-401 should be active in multiple hematologic cancers. These indications could represent significant market opportunities for SL-401.

  • Develop and commercialize SL-701 in multiple brain cancers. STML plans to advance SL-701 into a Phase IIb clinical trial for the treatment of pediatric patients with malignant glioma. STML also plans to initiate a Phase IIb clinical trial in adult second-line GBM.
  • Leverage the proprietary drug discovery platform, StemScreen®, to identify new therapeutics. STML intends to utilize its proprietary discovery platform to identify new CSC-targeted drug candidates.

STML may conduct some of these efforts internally and/or leverage its platform to forge strategic collaborations. STML has utilized StemScreen® to identify a number of preclinical drug candidates and may initiate IND-enabling studies either alone or in collaboration with strategic partners.

  • Develop commercialization capabilities in North America and Europe. STML believes that the infrastructure required to commercialize its oncology products is relatively limited, which may make it cost-effective for STML to internally develop a marketing effort and sales force.

If SL-401 and SL-701 are approved by the FDA and other regulatory authorities for first use, STML plans to commercialize these products themselves in North America and Europe through direct sales and distribution.

  • Continue to both leverage and fortify the CSC intellectual property portfolio.

Intellectual Property

STML has developed a proprietary discovery platform, StemScreen®, for the identification of novel CSC-targeted compounds. StemScreen® contrasts with traditional drug discovery methods that have been designed to identify compounds that target tumor bulk, not CSCs (cancer stem cells).

StemScreen® includes an assay that utilizes live cells to track CSCs in their natural state during high throughput screening, which is a method that permits the rapid testing of many compounds on a small scale for enhanced efficiency. STEM believes this approach represents a major technological advance because not only is it Cancer Stem Cells focused and high throughput, but it also does not require artificial manipulation to create CSC-like cells as other systems do. STML has utilized StemScreen® to discover a number of product candidates. STML believes that this platform may be instrumental in the discovery of new compounds targeting a wide range of cancer types.

Patents

STML's intellectual property portfolio includes 13 issued patents and more than 30 pending patent applications in the United States and abroad. This portfolio includes owned and exclusively in-licensed intellectual property that STML believes is early and broad with respect to the use of CSC-directed therapeutics and diagnostics (including companion diagnostics), as well as drug discovery.

Competition

There are a number of biopharmaceutical companies focused on developing therapeutics that target CSCs, including Boston Biomedical, Inc., Eclipse Therapeutics, Inc., OncoMed Pharmaceuticals, Inc. and Verastem, Inc. (NASDAQ:VSTM). There are also several biopharmaceutical companies that do not appear to be primarily focused on CSCs, but may be developing at least one CSC-directed compound. These companies include Astellas Pharma US, Inc., Boehringer Ingelheim GmbH, Dainippon Sumitomo Pharma Co. Ltd., Geron Corp., GlaxoSmithKline plc, ImmunoCellular Therapeutics, Ltd, Macrogenics Inc., Micromet, Inc. (an Amgen, Inc. Company), Pfizer Inc., Roche Holding AG, Sanofi U.S. LLC, and others.

Additionally, there are a number of companies working to develop new treatments for AML, which may compete with SL-401, including Ambit Biosciences Corporation, Celator Pharmaceuticals, Inc., Celgene Corporation, Clavis Pharma ASA, Cyclacel Pharmaceuticals, Inc., Eisai Co. Ltd., Genzyme Corporation (now a Sanofi company), and Sunesis Pharmaceuticals, Inc., among others.

There are also a number of drugs used for the treatment of brain cancer that may compete with SL-701, including, Avastin® (Roche Holding AG), Gliadel® (Eisai Co. Ltd.), and Temodar® (Merck & Co., Inc.). There are a number of companies working to develop brain cancer therapeutics with programs in clinical testing, including Celldex Therapeutics, Inc., ImmunoCellular Therapeutics, Ltd., Merck & Co. Inc., Novartis AG, Roche Holding AG and others.

Post-IPO Major Shareholders

  • Ivan Bergstein, M.D. (Chairman & CEO) 31.7%
  • Madoff Family LLC, 8.7%
  • Neuberger Berman Athyrium LLC, 8%

Use of Proceeds

STML expects to net $20 million from its IPO. Proceeds are allocated as follows:

  • SL-401. STML plans to complete a pivotal Phase IIb single-arm trial of SL-401 in patients with BPDCN. STML plans to use $1.5 million to complete the BPDCN trial. STML also plans to advance SL-401 into a registration-directed randomized Phase IIb clinical trial to treat adult AML patients as a third-line treatment. STML plans to use $7 million to initiate and advance the AML trial to an interim analysis at 60 and 90 patients.
  • SL-701. STML plans to advance SL-701 into a Phase IIb clinical trial to treat pediatric patients with malignant glioma. STML also plans to initiate a Phase IIb clinical trial of SL-701 in adult second-line GBM. STML plans to use $1 million, together with funding STML is seeking to obtain from the National Cancer Institute, or NCI, for the pediatric trial, to complete these trials.

Remaining proceeds will be used for general corporate purposes.

Disclaimer: This IPO report is based on a reading and analysis of STML's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: Stemline Therapeutics