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GlycoMimetics Inc (GLYC), a clinical stage biotech firm in the process of developing glycomimetic treatments for complications of sickle-cell disease and forms of leukemia, plans to raise $46 million in its upcoming IPO on Friday, January 10th.

The Gaithersburg, Maryland-based firm expects to offer 5.8 million shares at a price of $8 per share. It should be noted that the firm previously postponed its IPO, which had been scheduled for November 8, 2014. At that time, GLYC was expected to price between $14 and $16 per share, and the firm had planned to offer 4.0 million shares. GlycoMimetics has not commented on the reasoning behind the postponement. See our prior article here.

GLYC filed on October 4, 2013
Lead Underwriters: Barclays Capital, Jefferies LLC
Underwriters: Canaccord Genuity, Stifel Nicolaus & Company

Summary
GLYC is a clinical stage biotech firm attempting to discover and develop novel glycomimetic drugs to treat diseases related to carbohydrate biology. The firm's lead candidate, GMI-1070, is intended for the treatment of a vaso-occlusive crisis (VOC), which is an extremely dangerous complication of sickle-cell disease. VOC can cause attacks of debilitating pain that occur regularly throughout the life of a patient; tens of thousands of Americans are hospitalized by the condition every year.

GLYC concluded a Phase 2 clinical trial of GMI-1070 in April 2013 with promising results, including decreased lengths of hospital stays, improved recovery times, and decreased opioid painkiller use. GLYC is also in the process of developing a pipeline of glycomimetic drug candidates, which includes GMI-1271, designed to treat acute myeloid leukemia. Much of the proceeds from this IPO will be directed towards advancing GMI-1271 through clinical trials.

Valuation
GLYC offers the following figures in its S-1 balance sheet for the nine months ending September 30, 2013:

Revenue: $3,915,236.00
Net Loss: ($6,738,256.00)
Total Assets: $9,560,985.00
Total Liabilities: $3,045,918.00
Stockholders' Equity: $6,515,067.00

As a clinical stage biotech firm, GLYC's current net losses are to be expected. Until the firm has had one or more of its candidates approved and commercialized, GLYC is highly unlikely to turn a profit.

Business
GLYC has entered into an agreement with Pfizer (PFE) under which Pfizer will be responsible for the further development, regulatory approval, and commercialization of GMI-1070. GLYC will be eligible to receive up to $115 million in development milestones, $70 million in regulatory milestones, and $135 million in commercial milestones, along with tiered royalties based on net sales of GMI-1070.

GLYC must compete with other firms seeking to develop treatments for the same diseases. Mast Therapeutics (MSTX) is in the process of developing a drug to treat outbreaks of VOC, while Selexys Pharmaceuticals and several other firms are attempting to develop treatments which will prevent VOC entirely.

Management
Co-founder, President and CEO Rachel K. King has been with GLYC since its 2003 inception. She previously served as an Executive in Residence at New Enterprise Associates and as a Senior Vice President of Novartis Corporation (NVS). She currently serves as Chair of the Board of the Biotechnology Industry Organization and as Chair of the Maryland Life Sciences Advisory Board.

Conclusion

We rate this offering a buy in the lower revised range of $8 for aggressive investors. We are hearing the deal is oversubscribed which may help it trade up during the first day.

Though clinical stage biotech firms always carry significant investment risks, since their trials may never bear fruit, GLYC has the potential to be a strong life sciences company.

The firm's partnership with Pfizer on its lead product candidate is a promising indicator of the firm's scientific competence and business acumen. If the early trial successes of GMI-1070 translate into commercial successes (or, at the very least, regulatory approval), there's good reason for investors to hope that the GLYC's development pipeline could turn into a goldmine.

The far lower expected price range attached to this IPO also makes it much more appetizing than the firm's delayed offering in November.

Source: GlycoMimetics IPO Kicks Off 2014 IPO Action