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Summary

  • GBIM is a biopharmaceutical company established in 1995 focused on developing products for the treatment of cancer and infectious diseases based on its proprietary Tarmogen® platform.
  • Shareholders have indicated an interest in purchasing an aggregate of up to $10 million (40%) of the IPO at the initial public offering price.
  • GBIM's accumulated deficit of -$217 million, which is very large and indicates the company's earlier business plans did not succeed.

Based in Louisville, CO, GlobeImmune (NASDAQ:GBIM) scheduled a $25 million IPO on the Nasdaq with a market capitalization of $82 million at a price range midpoint of $16 for Friday, June 27, 2014.

The full IPO calendar is available at IPOpremium

SEC Documents

Manager, Co-Managers: Aegis Capital Corp.

Joint Managers: None

End of lockup (180 days): Wednesday, December 24, 2014

End of 25-day quiet period: Tuesday, July 22, 2014

Summary

GBIM is a biopharmaceutical company established in 1995 focused on developing products for the treatment of cancer and infectious diseases based on its proprietary Tarmogen® platform.

GBIM has on-going collaborations with Gilead Sciences (NASDAQ:GILD) and Celgene (NASDAQ:CELG), and also has a $4 million grant from the National Institute of Allergy and Infectious Diseases of the National Institutes of Health.

Valuation

Glossary

Valuation Ratios

Mrkt Cap (MM)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

.

GlobeImmune

$82

14.7

-8.4

4.9

4.9

32%

Conclusion

The rating on GBIM is neutral.

GBIM has no products in Phase 3 clinical trials. Price-to-book is 4.9, which is a little high for a company with no products on Phase 3 clinical trials.

However, Celgene Corporation, HealthCare Ventures VII, L.P., Lilly Ventures Fund I, LLC, Morgenthaler Partners, VII, L.P., and certain other affiliates of directors, have indicated an interest in purchasing an aggregate of up to $10 million (40%) of the IPO at the initial public offering price.

GBIM's accumulated deficit of -$217 million, which is very large and indicates the company's earlier business plans did not succeed.

Many underwritings from Aegis do not work out well for investors, although some do.

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

Business

GBIM is a biopharmaceutical company established in 1995 focused on developing products for the treatment of cancer and infectious diseases based on its proprietary Tarmogen® platform.

Tarmogens activate the immune system by stimulating a subset of white blood cells called T cells that destroy infected or malignant cells, in contrast to traditional vaccines which predominately stimulate antibody production.

GBIM has four Tarmogen product candidates in clinical evaluation for infectious disease and multiple cancer indications.

GBIM has no product candidates in Phase 3 clinical trials.

Collaborations

GBIM has two strategic collaborations with leading biotechnology companies.

In October 2011, Gilead Sciences exclusively licensed product candidates intended to treat chronic hepatitis B virus, or HBV, infection.

Celgene entered into a collaboration and option agreement for certain oncology product candidates in May 2009. Under this agreement, in July 2013 Celgene exercised its option for a worldwide, exclusive license to the GI-6300 program, which is a Tarmogen program targeting the brachyury protein. Brachyury plays a role in the metastatic progression of certain cancers and is believed to be fundamental in the formation of chordomas, rare bone tumors of the spine.

GBIM also has wholly-owned, clinical stage oncology program, GI-4000, that targets tumors with mutations in a protein called Ras. In March 2013, Celgene declined to exercise its option to GI-4000 and returned all rights and development responsibility to GBIM.

Through March 31, 2014, CELG received over $60 million from these collaborations.

In August 2013, GBIM received a $4 million Research Project Grant from the National Institute of Allergy and Infectious Diseases of the National Institutes of Health to support the development of Tarmogen immunotherapy product candidates intended to treat or prevent tuberculosis infection. The work for this grant will be performed and reimbursed over four years.

Platform technology

GBIM believes that its Tarmogen platform has applicability to a number of diseases, and may enable GBIM to develop a broad portfolio of products.

GBIM's Tarmogen platform technology has characteristics that GBIM believes will enable GBIM, in collaboration with its strategic collaborators and independently, to develop and commercialize a portfolio of products. Highlights of the technology include:

Tarmogens & the target protein

Tarmogens activate the cellular immune response: Each Tarmogen product candidate consists of intact, heat-inactivated yeast containing the target protein. GBIM believes its data demonstrate that immunization with a Tarmogen results in T cell immune responses against the target protein and reduction in the number of abnormal cells containing the same target protein.

Broad applicability: GBIM has five clinical trials evaluating Tarmogen product candidates in oncology and infectious diseases in randomized, controlled Phase 2 clinical trials.

GBIM has successfully created Tarmogens that express over 100 different proteins.

In eleven Phase 1 and 2 clinical trials, GBIM has administered Tarmogen product candidates to more than 500 patients and healthy volunteers, including some who have received monthly dosing for over five years, with a tolerability profile that GBIM believes will allow its product candidates to be added to other therapeutic regimens without leading to additional toxicity.

Proven development capability: GBIM has advanced five Tarmogen programs from concept into human clinical trials in approximately six to 18 months.

Efficient manufacturing: GBIM manufactures Tarmogens through a process that yields a stable, off-the-shelf product that is disease- or protein-specific. GBIM has a 22,000 square foot manufacturing facility that it believes has the capacity for commercial-scale production.

Dividend Policy

No dividends are planned.

Intellectual Property

GBIM seeks patent protection in the United States and internationally for its Tarmogen technology, Tarmogen product candidates, and other technology GBIM develops.

GBIM's policy is to patent or in-license the technology, inventions and improvements that GBIM considers important to the development of its business.

Competition

GBIM faces competition from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide.

Given the significant unmet medical need for novel therapies to treat cancer and chronic infection, these are areas of specialty for many companies, public and private universities and research organizations that are actively engaged in the discovery and research and development of products.

As a result, there are and will likely continue to be extensive research and substantial financial resources invested in the discovery and development of new products to treat cancer and chronic infection.

GBIM anticipates facing intense and increasing competition as new products enter the market and advanced technologies become available.

GBIM expects competition among products will be based on product efficacy and safety, the timing and scope of regulatory approvals, availability of supply, marketing and sales capabilities, reimbursement coverage, price and patent position.

5% stockholders

Celgene Corporation 12.8%

HealthCare Ventures VII, L.P. 11.3%

Morgenthaler Partners VII, L.P. 11.4%

Entities affiliated with Wexford-Kappa Investors LLC 7.5%

Entities affiliated with Sequel Limited Partnership III 7.3%

Lilly Ventures Fund I, LLC 5.2%

Entities affiliated with Medica Venture Partners 5.1%

Use of proceeds

GBIM expects to net $21 million from its IPO. Proceeds are allocated as follows:

$10.0 million to advance an additional infectious disease product into clinical trials and through clinical proof of concept, which means evidence of biological activity in the target patient population, and could be a Phase 1 or Phase 2 study;

$5.0 million to prepare its manufacturing facility for clinical trial and commercial scale manufacturing;

$5.0 million for additional development on its own internal programs and filing of one or more additional IND(s);

$1.0 million for completion of ongoing clinical trials for GI-6207, GI-6301 and GI-4000, including manufacturing of drug supply for such trials; and

The remainder for working capital and other general corporate purposes, including hiring of additional personnel and expenses associated with being a public company.

Disclaimer: This GBIM IPO report is based on a reading and analysis of GBIM'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: GlobeImmune