IPO Preview: Trevena

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 |  About: Trevena, Inc. (TRVN)
by: IPOdesktop

Based in King of Prussia, PA, Trevena (NASDAQ:TRVN) scheduled a $75 million IPO with a market capitalization of $291 million on the Nasdaq at a price range midpoint of $13 for Wednesday, November 20, 2013.

Ten operating company IPOs are scheduled for this week. The full IPO calendar can be found at IPOpremium.

S-1 filed November 6, 2013

Manager, Joint managers: Barclays, Jefferies

Co-Managers: Canaccord Genuity, JMP Securities, Needham & Co.

Summary
TRVN is a clinical stage biopharmaceutical company that discovers, develops and intends to commercialize therapeutics that use a novel approach to target G protein coupled receptors, or GPCRs.

TRVN has no collaboration partners and is in phase 1 and phase 2 clinical trials.

Valuation

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing June 6 mos

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

Trevena

$294

n/a

-13.8

2.6

2.5

26%

SCORECARD

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Market Do-

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Total

1-5, 5 is high

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mination

tary

rating

20 is perfect

2

2.5

0

1.5

C, 6

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Accumulated deficit of ($75) million.

Glossary

Conclusion

The rating on TRVN is neutral to avoid.

To put the conclusions and observations in context, the following is reorganized, edited and summarized from the full S-1 referenced above:

Business
TRVN is a clinical stage biopharmaceutical company that discovers, develops and intends to commercialize therapeutics that use a novel approach to target G protein coupled receptors, or GPCRs.

Phase 1 And Phase 2 clinical trials

TRVN has completed a Phase 2a clinical trial and plans to initiate a Phase 2b clinical trial of TRV027 for acute heart failure, or AHF. Forest Laboratories Holdings Limited, or Forest, has the exclusive option to license TRV027 from TRVN.

TRVN's other lead program, TRV130, has completed a Phase 1b clinical trial to evaluate its potential to treat moderate-to-severe acute pain intravenously and TRVN plans to complete two additional Phase 1 clinical trials and to initiate a Phase 2 trial in the first half of 2014.

Worldwide rights
TRVN has retained all worldwide development and commercialization rights to TRV130. TRVN plans to develop and commercialize its two lead product candidates initially in the acute care hospital markets and to advance additional product candidates, including its two most advanced preclinical programs focused on central nervous system, or CNS, indications.

GPCRs
GPCRs are a large family of cell surface receptors that trigger two signaling pathways, G protein and b-arrestin, and are implicated in cellular function and disease processes. More than 30% of all currently marketed therapeutics target GPCRs. Currently available therapeutics that target GPCRs, or GPCR ligands, are typically not signal specific, and therefore either inhibit both the G protein and b-arrestin pathways (an antagonist ligand) or activate both pathways (an agonist ligand).

This lack of signal specificity often results in a suboptimal therapeutic profile for these drugs because in many cases one of the pathways is associated with a beneficial therapeutic effect and the other is associated with an undesirable side effect.

Product platform
TRVN uses its proprietary Advanced Biased Ligand Explorer, or ABLE, product platform to identify "biased" ligands, which are compounds that activate one of the two signaling pathways of the GPCR and inhibit the other. This signaling specificity is the basis for TRVN's drug discovery and development approach, which is to identify and develop therapeutics targeting established GPCRs while offering a differentiated and superior therapeutic profile compared to currently available GPCR-targeted drugs.

Intellectual property

The portfolio includes one issued U.S. patent, U.S. Patent No. 8,486,885, which claims, among other things, TRV027 and compositions comprising TRV027.

TRVN's TRV130 patent portfolio, which is wholly owned by TRVN, includes two pending U.S. patent applications claiming TRV130, other compounds and/or methods of making or using the same.

TRVN's TRV734 patent portfolio, which is wholly owned by TRVN, includes two pending U.S. patent applications claiming TRV734, other compounds and/or methods of making or using the same.

Competition

If TRV027 is approved for the indication of AHF, it will compete with the currently marketed drugs that are widely used for that indication, including diuretics, vasodilators and inotropes.

In addition to these widely used drugs, TRVN is also aware of three product candidates in mid- to late-stage clinical development for AHF. These are serelaxin, being developed by Novartis and currently in Phase 3 clinical trials in patients with acute heart failure, omecamtiv mecarbil, being developed by Amgen in collaboration with Cytokinetics Incorporated and currently in Phase 2b clinical trials for acute and chronic heart failure, and ularitide, being developed by Cardiorentis and currently in Phase 3 clinical trials for acute heart failure.

If TRV130 is approved for IV treatment of moderate-to-severe acute pain, it will compete with widely used, currently marketed opioid analgesics, such as morphine, hydromorphone and fentanyl. The use of these agents is limited by well-known adverse effects, such as respiratory depression, nausea and vomiting, constipation and postoperative ileus.

5% stockholders

Alta Partners VIII, L.P. 21%

New Enterprise Associates, Limited Partnership 21%

Polaris Venture Partners V, L.P. and its affiliated entities 21%

Forest Laboratories Holdings Limited 18%

HealthCare Ventures VIII, L.P. 13%

Use of proceeds

  • TRVN expects to net $67.3 from its IPO. Proceeds are allocated as follows:
  • $27 million to fund the costs of a Phase 2b clinical trial for TRV027;
  • $41 million to fund TRV130 through Phase 2 clinical development, including completing two Phase 1 studies, a Phase 2 efficacy trial, two Phase 2 safety trials, and additional clinical trials and non-clinical activities to support Phase 3 clinical trials;
  • $7 million to fund TRV734 through Phase 1 clinical development;
  • $6 million to fund selection of a product candidate from its delta opioid receptor program and IND-enabling studies for such product candidate;
  • $8 million to fund research and development to apply its discovery platform to additional GPCRs and to identify biased ligands against those further targets; and
  • The remainder for working capital and general corporate purposes.

Disclaimer: This TRVN IPO report is based on a reading and analysis of TRVN'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.

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.