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Summary

  • Nanopharmaceutical product candidates consist of proprietary polymers that are covalently linked to anti-cancer therapeutics, or payloads.
  • Lead product is in Phase II clinical development, which is a precursor to an actual clinical trial.
  • No collaboration partners, although existing shareholders indicated an interest in purchasing up to 30% of the IPO.

Cerulean Pharma (NASDAQ:CERU) has nanopharmaceutical product candidates that consist of proprietary polymers that are covalently linked to anti-cancer therapeutics. The company is headquartered in Cambridge, MA.

The complete IPO calendar is available at IPOpremium.

The manager is Leerink Partners. The co-managers are Canaccord Genuity, JMP Securities, Wedbush PacGrow Life Sciences.

CERU scheduled a $60 million IPO, with a market capitalization of $172 million, at a price range midpoint of $12 for Thursday, April 10, 2014 on the Nasdaq. SEC Filings

Overview

CERU's nanopharmaceutical product candidates consist of proprietary polymers that are covalently linked to anti-cancer therapeutics, or payloads.

Valuation

Glossary

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

Cerulean Pharma

$172

n/a

-10.1

2.9

2.9

35%

Conclusion

CERU's lead product is in Phase II clinical development, which is a precursor to an actual clinical trial.

CERU has no collaboration partners, although existing shareholders indicated an interest in purchasing up to 30% of the IPO.

The cash burn rate is fairly high, as indicated by a negative P/E ratio of -10, and the price to book ratio is 2.9, in a medium range.

The rating on CERU is neutral.

Business

CERU is a clinical-stage oncology-focused company applying its proprietary dynamic tumor targeting platform to develop differentiated therapies.

CERU's nanopharmaceutical product candidates consist of proprietary polymers that are covalently linked to anti-cancer therapeutics, or payloads.

CERU believes these nanopharmaceuticals dynamically target tumors by exploiting the leakiness of new blood vessels in tumors as an entry portal into tumor tissue, followed by active uptake into tumor cells and the sustained release of the anti-cancer payload inside the tumor cells.

Lead product candidates

The lead product candidate, CRLX101, is in Phase II clinical development, and has the potential to address an unmet need where existing cancer therapies fail.

CRLX301, the second product candidate from CERU's dynamic tumor targeting platform, is a nanopharmaceutical with docetaxel, a potent and durable microtubule stabilizer, as its anti-cancer payload. CERU intends to commence a clinical trial of CRLX301 by the end of 2014.

Clinical trials

CERU's lead product candidate, CRLX101, is a dynamically tumor targeted nanopharmaceutical in Phase II clinical development, and has the potential to address an unmet need where existing cancer therapies fail.

CERU believes CRLX101, which contains camptothecin as its anti-cancer payload, is a potent, durable and combinable inhibitor of topoisomerase 1, or topo 1, and hypoxia inducible factor, or HIF.

Clinical trials for CRLX101 have been conducted in multiple indications at several sites in over 200 patients.

In clinical trials conducted to date, CRLX101 appears to be active and well-tolerated as monotherapy, and active and combinable with Avastin (bevacizumab).

In addition, CERU believes CRLX101 may be combinable with other anti-cancer therapies. CERU is pursuing development of CRLX101 in combination with anti-cancer therapies in three ongoing clinical development programs:

A combination trial with Avastin in Phase II in patients with relapsed renal cell carcinoma;

A two-part clinical trial in Phase II in patients with relapsed ovarian cancer-consisting of a single-arm trial of CRLX101 as monotherapy and a single-arm combination trial with Avastin; and

A combination trial with Xeloda (capecitabine) and radiotherapy in Phase Ib in patients with rectal cancer who are being treated through the administration of therapeutic agents prior to surgery. CERU refers to this form of treatment as neoadjuvant therapy, and it refers to patients who receive neoadjuvant therapy as patients with neoadjuvant rectal cancer.

Dividend Policy

No dividends are planned.

Intellectual Property

CERU's patent portfolio includes issued patents and pending applications worldwide.

These patents and applications fall into three broad categories: (1) covalent linkage of therapeutic agents to a cyclodextrin-containing polymer, or CDP, as in CRLX101 and CRLX301; (2) association of a therapeutic agent to a polymer and (3) polymeric nanoparticles which can be used to deliver various types of therapeutic agents, including large molecules.

Competition

The oncology market is fiercely competitive.

In each indication CERU is pursuing, there are approved cancer therapeutics and agents under clinical development for use as monotherapy and combination therapy.

Each of the top ten global pharmaceutical companies and most of the mid-size pharmaceutical companies has a strong research and development and commercial presence in oncology.

Smaller companies also focus on oncology, including companies such as ARIAD Pharmaceuticals, Inc., Agios Pharmaceuticals, Inc., BIND Therapeutics, Inc., Clovis Oncology, Inc., Endocyte, Inc., Epizyme, Inc., ImmunoGen, Inc., Incyte Corporation, Infinity Pharmaceuticals, Inc., MacroGenics, Inc., Merrimack Pharmaceuticals, Inc., OncoMed Pharmaceuticals, Inc., Onconova Therapeutics, Inc., Pharmacyclics, Inc., Puma Biotechnology, Inc., Seattle Genetics, Inc. and TESARO, Inc.

Companies with marketed nanopharmaceutical oncology products include Celgene Corporation (Abraxane (nab-paclitaxel) indicated for breast cancer, NSCLC and pancreatic cancer) and Spectrum Pharmaceuticals (Marqibo (vincristine sulfate liposome injection) indicated for relapsed Philadelphia chromosome-negative acute lymphoblastic leukemia).

Companies with nanopharmaceutical oncology product candidates in clinical development include BIND Therapeutics, Inc. (BIND 014 for NSCLC and metastatic castration-resistant prostate cancer), Celator Pharmaceuticals, Inc. (CPX-351 for acute myeloid leukemia), Celsion Corporation (ThermoDox (lyso-thermosensitive liposomal doxorubicin) for solid tumors), Cytimmune Sciences, Inc. (CYT-6091 for oncology and autoimmune diseases) and Supratek Pharma Inc. (SP1049C for solid tumors).

In addition, at least two companies have oncology product candidates in clinical development that are camptothecin reformulations: Merrimack Pharmaceuticals' liposomal irinotecan (MM-398 for pancreatic and colorectal cancer) and Nektar Therapeutics' etirinotecan pegol (NKTR102 for breast cancer).

5% stockholders

Entities affiliated with Polaris Partners 32.3%

Entities affiliated with Venrock 20.8%

Entities affiliated with Lux Capital 9.4%

Entities affiliated with Lilly Ventures 16.2%

Entities affiliated with Crown Ventures 10.9%

Use of proceeds

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

$26 million to fund clinical development of CRLX101;

$10 million to fund research and development of CRLX301 and other product candidates; and

the remainder for working capital and other general corporate purposes.

Source: IPO Preview: Cerulean Pharma