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Based in Cambridge, MA, Eleven Biotherapeutics (NASDAQ:EBIO) scheduled a $60 million IPO on the Nasdaq with a market capitalization of $206 million at a price range midpoint of $14 for Thursday, Feb. 6, 2014.

The full IPO calendar is available at IPOpremium.com.

Conclusion

Positive, phase 3 planned, shareholders buying, cash burn rate ok, see valuation below.

SEC Documents
Manager, Joint managers: Citi, Cowen & Company, Leerink Partners

Co-Managers: None

End of lockup (180 days): Tuesday, August 5, 2014

Summary

EBIO is a clinical-stage biopharmaceutical company with a proprietary protein engineering platform, called AMP-Rx, that it applies to the discovery and development of protein therapeutics to treat diseases of the eye.

EBIO's planned pivotal Phase 3 clinical program will consist of two Phase 3 clinical trials evaluating the safety and efficacy of EBI-005 for the treatment of moderate to severe dry eye disease and a separate clinical trial evaluating the safety of treatment with EBI-005 for one year.

Valuation

Glossary

Cash burn rate: when a company loses money with minimal depreciation and amortization (think biopharmas), the negative Price/Loss ratio is an indication of cash burn rate. The higher the loss the lower the absolute (negative) ratio. The lower the loss the higher the absolute (negative) ratio.

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing Sept 9 mos

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

Eleven Biotherapeutics

$206

771.8

-11.9

3.5

3.5

29%

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

Business

EBIO is a clinical-stage biopharmaceutical company with a proprietary protein engineering platform, called AMP-Rx, that it applies to the discovery and development of protein therapeutics to treat diseases of the eye.

EBIO's therapeutic approach is based on the role of cytokines in diseases of the eye, its understanding of the structural biology of cytokines and its ability to rationally design and engineer proteins to modulate the effects of cytokines.

Cytokines are cell signaling molecules found in the body that can have important inflammatory effects.

EBIO's most advanced product candidate is EBI-005, which it designed, engineered and generated using its AMP-Rx platform and are developing as a topical treatment for dry eye disease and allergic conjunctivitis.

Clinical trials

EBIO's planned pivotal Phase 3 clinical program will consist of two Phase 3 clinical trials evaluating the safety and efficacy of EBI-005 for the treatment of moderate to severe dry eye disease and a separate clinical trial evaluating the safety of treatment with EBI-005 for one year.

Based on EBIO's estimates regarding patient enrollment, if this clinical program is successful, EBIO plans to submit a Biologics License Application, or BLA, to the U.S. Food and Drug Administration, or FDA, seeking approval of EBI-005 for the treatment of dry eye disease in the United States in the second half of 2016.

EBIO also plans to initiate a Phase 2 clinical trial to evaluate the use of EBI-005 in patients with allergic conjunctivitis in early 2014.

In 2013, EBIO completed a Phase 1b/2a clinical trial of EBI-005 in patients with moderate to severe dry eye disease. EBIO is initiating a pivotal Phase 3 clinical program evaluating EBI-005 for the treatment of moderate to severe dry eye disease.

Intellectual property

As of January 21, 2014, EBIO owned or exclusively in-licensed a total of 18 U.S. patent applications as well as numerous foreign counterparts of some of these patent applications.

Competition

Competitors include pharmaceutical companies, biotechnology companies, and specialty pharmaceutical and generic drug companies of various sizes, such as Shire Plc (lifitegrast), Acucela Inc., in collaboration with Otsuka Pharmaceutical Co., Ltd. (rebamipide), Mimetogen Pharmaceuticals Inc., in collaboration with Bausch + Lomb Corporation (MIM-D3), OphthaliX Inc. (CF101), Rigel Pharmaceuticals, Inc. (R9348) and Allergan, Inc

5% stockholders

Entities affiliated with Flagship Ventures Management, Inc. 28.8%

JAFCO Super V3 Investment Limited Partnership 18.4

Third Rock Ventures, L.P. 41.3%

Use of proceeds

EBIO expects to net $53 million from its IPO. Proceeds are allocated as follows:

  • $36 million to fund external research and development expenses for EBIO's pivotal Phase 3 clinical program for EBI-005 in patients with moderate to severe dry eye disease and, if the results from this program are favorable, the submission of a Biologics License Application, or BLA, to the United States Food and Drug Administration, or FDA, seeking approval of EBI-005 for the treatment of dry eye disease in the United States;
  • $3 million to fund external research and development expenses for EBIO's Phase 2 clinical trial of EBI-005 in patients with allergic conjunctivitis; and
  • the remainder for working capital and other general corporate purposes, which will include EBIO's internal research and development expenses for EBI-005, development of its preclinical product candidates and pursuit of its other research and discovery efforts and could also include the acquisition or in-license of other products, product candidates or technologies.

Disclaimer: This EBIO IPO report is based on a reading and analysis of EBIO'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: Eleven Biotherapeutics