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Based in South San Francisco, CA, Portola Pharmaceuticals (NASDAQ:PTLA) scheduled a $100 million IPO with a market capitalization of $469 million at a price range mid-point of $14, for Wednesday, May 22, 2013.

Five other new IPOs are scheduled for IPOs for this week. The full IPO calendar is here.

  • S-1 filed May 7, 2013
  • Manager, Joint Managers: Morgan Stanley; Credit Suisse
  • Co Managers: Cowen; William Blair; Sanford C. Bernstein

SUMMARY

PTLA is a biopharmaceutical company with an accumulated deficit of $220 million. It has a number of on-going collaborations (see COLLABORATIONS) below and also one terminated effort with Merck (NYSE:MRK).

The lead product, Betrixaban, is currently in a pivotal Phase III clinical study, to be completed in 2015. The Betgrixaban collaboration with Merck was terminated in September 2011.

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing March qtr

Cap (MM)

Sales

Earnings

BkValue

TangibleBV

in IPO

Portola Pharmaceuticals

$470

37.9

-6.5

2.4

2.4

21%

Glossary

CONCLUSION

PTLA is bleeding cash heavily, Merck apparently wasn't pleased with the progress of Betrixaban or it wouldn't have terminated the collaboration agreement. Plus, 2015 is a long way away, for completion of the Phase III clinical trial.

Nevertheless, price-to-book of 2.4 is low and PTLA will have 45% of its market cap in cash post-IPO. PTLA is a speculative buy on the IPO.

BUSINESS

PTLS is a biopharmaceutical company focused on the development and commercialization of novel therapeutics in the areas of thrombosis, other hematologic disorders and inflammation for patients who currently have limited or no approved treatment options.

LEAD PRODUCTS

PTLA's first lead product candidate Betrixaban is in a pivotal Phase III clinical study, and the second lead development candidate PRT4445 has completed the first of a series of Phase II proof-of-concept studies.

Betrixaban

Betrixaban is a novel oral once-daily inhibitor of Factor Xa in development for extended duration prophylaxis, or preventive treatment, of a form of thrombosis, or blood clots, known as venous thromboembolism, or VTE, in acute medically ill patients for up to 35 days.

In March 2012, PTLA initiated a pivotal Phase III study to evaluate oral once-daily Betrixaban for superiority as compared to subcutaneous injection of enoxaparin for extended VTE prophylaxis in acute medically ill patients with restricted mobility and other risk factors. This study is anticipated to enroll approximately 6,850 patients. Based on current enrollment, PTLA expects its current Phase III study of Betrixaban, or APEX, to be completed in mid-2015.

PTLA has completed preclinical testing for another product candidate, PRT2070, and plans to file an investigational new drug application, or IND, with the United States Food and Drug Administration, or FDA, in order to advance PRT2070 into a Phase I/II clinical study in 2013. PTLA has also completed multiple Phase I studies for PRT2607.

COLLABORATION AGREEMENTS

In July 2009, PTLA entered into an exclusive worldwide license and collaboration agreement with Merck to develop and commercialize Betrixaban, which was terminated effective September 2011.

In January 2013, PTLA entered into a clinical collaboration agreement with Lee's Pharmaceutical (HK) Ltd. to jointly expand the Phase III APEX study of Betrixaban into China with an exclusive option for Lee's to negotiate for the exclusive commercial rights to Betrixaban in China.

In October 2012, PTLA entered into a three-way agreement with Bristol-Myers Squibb Company (NYSE:BMS) and Pfizer Inc. (NYSE:PFE) to include subjects dosed with apixaban, their jointly owned Factor Xa inhibitor product, in one of PTLA's proof-of-concept studies of PRT4445.

In February 2013, PTLA entered into a three-way agreement with Bayer Pharma AG (OTCPK:BAYZF), and Janssen Pharmaceuticals, Inc. to include subjects dosed with rivaroxaban, their jointly owned Factor Xa inhibitor product, in one of PTLA's proof-of-concept studies of PRT4445.

In February 2013, PTLA entered into an agreement with Aciex Therapeutics, Inc. for topical and intranasal co-development and co-commercialization of PRT2070 and certain related compounds for nonsystemic indications, such as the treatment and prevention of ophthalmological diseases by topical administration and allergic rhinitis by intranasal administration. PTLA retains rights to other non-systemic indications, including dermatologic disorders.

In October 2011, PTLA entered into an exclusive, worldwide license and collaboration agreement with Biogen Idec (NASDAQ:BIIB) to develop and commercialize selective Syk kinase inhibitors for the treatment of autoimmune and inflammatory diseases.

In June 2005, PTLA entered into a license agreement with Astellas Pharma, Inc. (OTCPK:ALPMF) pursuant to which it licensed from Astellas certain rights to research, develop and commercialize Syk kinase inhibitors, including PRT2070 and PRT2607. This agreement was amended in December 2010

INTELLECTUAL PROPERTY

As of April 30, 2013: PTLA owned 28 issued U.S. patents, 43 U.S. patent applications and 93 issued patents and 170 patent applications in other jurisdictions. PTLA also co-owned 12 additional patents and patent applications. In addition, as of April 30, 2013, PTLA had licensed 156 issued patents and 78 patent applications from third parties, mostly on an exclusive basis.

5% STOCKHOLDERS PRE-IPO

  • Maxwell (Mauritius) Pte Ltd, 14%
  • MPM BioVentures III, L.P., 9.6%
  • Prospect Venture Partners II, L.P., 7.1%
  • Brookside Capital Partners Fund LP, 7%
  • Sutter Hill Ventures, 7%
  • Eastern Capital Limited, 7%
  • Advanced Technology Ventures VII, L.P., 6%
  • Frazier Healthcare IV, LP, 5.6%

USE OF PROCEEDS

PTLA expects to net $89 million from its IPO. As of March 31, 2013, PTLA had cash, cash equivalents and investments of $124.6 million.

PTLA estimates that it will use the net proceeds from this offering, together with cash, cash equivalents and investments, as follows:

  • $135.0 million to fund ongoing clinical program for Betrixaban;
  • $28.0 million to fund continued development of PRT4445;
  • $15.0 million to fund a Phase I/II study in hematologic cancers for PRT2070; and
  • The balance to fund working capital, capital expenditures and other general corporate purposes, which may include the acquisition or licensing of other products, businesses or technologies.

Disclaimer: This PTLA IPO report is based on a reading and analysis of PTLA's F1-1A 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: Portola Pharmaceuticals