IPO Preview: Avalanche Biotechnologies


AAVL is a clinical-stage biotechnology company focused on discovering and developing novel gene therapies to transform the lives of patients with sight-threatening ophthalmic diseases.

Relatively low cash burn rate relative to market cap (P/E ratio of -46).

53% of the IPO is spoken for.

Based in Menlo Park, CA, Avalanche Biotechnologies (AAVL) scheduled a $76 million IPO on the Nasdaq with a market capitalization of $292 million at a price range midpoint of $14 for Thursday, July 31, 2014.
Price range increased to $16-$17.

The full IPO calendar is available at IPOpremium

SEC Documents

Manager, Co-Managers: Jefferies, Cowen and Company, Piper Jaffray

Joint Managers: William Blair

End of lockup (180 days): Tuesday, January 27, 2015

End of 25-day quiet period: Monday, August 25, 2014


AAVL is a clinical-stage biotechnology company focused on discovering and developing novel gene therapies to transform the lives of patients with sight-threatening ophthalmic diseases.



Valuation Ratios

Mrkt Cap ($mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

annualizing Q1 '14

Avalanche Biotechnologies








The rating is positive.

Low price-to-book ratio of 2.3

Relatively low cash burn rate relative to market cap (P/E ratio of -46)

53% of the IPO is spoken for

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


AAVL is a clinical-stage biotechnology company focused on discovering and developing novel gene therapies to transform the lives of patients with sight-threatening ophthalmic diseases.

AAVL has leveraged its next-generation gene therapy platform, Ocular BioFactory, to create a robust pipeline of product candidates.

AAVL's product candidates are designed to provide long-term efficacy or a functional cure for these diseases by inducing a sustained expression of a therapeutic protein with a one-time administration in the eye.

AAVL is targeting a variety of prevalent and rare genetic ophthalmic diseases with significant unmet medical need.

AAVL's lead product candidate is AVA-101 for the treatment of wet age-related macular degeneration (AMD).

AAVL believes that this product candidate could transform the treatment paradigm and address the unmet need in the large wet AMD market.

AAVL has generated human proof-of-concept data for AVA-101 in a Phase 1 trial with eight wet AMD subjects conducted at LEI in Australia.

In that Phase 1 trial, AVA-101 was well tolerated with no drug-related adverse events. In addition, subjects treated with AVA-101 showed meaningful improvement in their visual acuity test scores (up to 15 letter improvement on an eye chart from baseline), and most subjects did not receive any rescue injections of standard-of-care therapy (required for subjects exhibiting disease progression) during the one-year trial period.

AAVL is currently conducting a Phase 2a trial for AVA-101 in wet AMD. Interim drug safety surveillance data received in June 2014 from this ongoing study suggests that AVA-101 continues to be well tolerated.

AAVL expects to receive top-line data from this ongoing Phase 2a trial in mid-2015. AAVL owns exclusive rights to develop and commercialize AVA-101 worldwide.

In addition to AVA-101, AAVL's Ocular BioFactory platform has generated other promising product candidates for the treatment of severe ophthalmic diseases, including AVA-201 and AVA-311.

AAVL is developing AVA-201 as a next-generation product candidate for the prevention of wet AMD. AVA-201 produces the same anti-vascular endothelial growth factor (VEGF) protein as AVA-101 using a proprietary, customized delivery mechanism, or vector, that can be administered earlier in the disease progression, before the onset of wet AMD. AAVL owns worldwide rights to AVA-201.

AVA-311 is being developed in collaboration with AAVL's partner Regeneron for the treatment of X-linked retinoschisis (XLRS), a rare genetic disease of the retina with no approved therapy. Based on preclinical studies to date, AVA-311 has shown to delay the progression of XLRS and improve vision by effectively delivering functional copies of the RS1 gene in retinal cells of mice.

Dividend Policy

No dividends are planned

Intellectual Property

AAVL has 27 pending patent applications in the United States and corresponding foreign patent applications.

At least 18 patent applications have been filed in the United States and corresponding foreign jurisdictions by or on behalf of universities which have granted AAVL exclusive license rights to the technology.

To date, 12 patents have issued to AAVL or to its licensors. AAVL's policy is to file patent applications to protect technology, inventions and improvements to

inventions that are commercially important to the development of its business.


AVA-101 will compete with a variety of therapies currently marketed and in development for wet AMD using therapeutic modalities such as biologics, small molecules and gene therapy.

Existing anti-VEGFs, Lucentis, EYLEA and Avastin, are well established therapies and are widely accepted by physicians, patients and third-party payers as the standard of care for the treatment of wet AMD.

There are several other companies with marketed products or products in development for the treatment of wet AMD, including Allergan (NYSE:AGN), Iconic Therapeutics, Inc., LPath Therapeutics Inc. (LPTN), Novartis (NYSE:NVS), Ocular Therapeutix, Inc. (NASDAQ:OCUL), Ophthotech Corporation (NASDAQ:OPHT), Hoffmann-La Roche Ltd., Neurotech Pharmaceuticals, Inc. and Valeant Pharmaceuticals North America LLC (NYSE:VRX).

AAVL's preclinical product candidates are being developed for the treatment of prevalent or rare ophthalmic diseases, such as the prevention of wet AMD and XLRS, for which there are no approved therapies. However, there are multiple companies developing gene therapies for ophthalmic diseases, including Applied Genetic Technologies (NASDAQ:AGTC), Asklepios, Eos Neuroscience, GenSight, Genzyme, Hemera Biosciences, ReGenX, RetroSense and Spark Therapeutics.

5% stockholders

Zygtech, LLC 17.2%

Entities affiliated with Venrock 13.2%

Entities affiliated with FMR, LLC 8.9%

Regeneron Pharmaceuticals, Inc. 8.2%

Entities affiliated with Deerfield Management Company, L.P. 5.8%

Thomas W. Chalberg, Jr., Ph.D. 11.4%

Mark S. Blumenkranz, M.D. (6) 6.9%

Steven D. Schwartz, M.D. 5.9%

Use of proceeds

AAVL intends to use the $68 million in proceeds from its IPO as follows:

  • $20 million to fund Phase 3 research and development start up activities for its AVA-101 study to evaluate safety and efficacy in subjects with wet AMD;
  • $15 million to fund direct Phase 1/2 research and development expenses for its AVA-201 product candidates and other potential product candidates in its development program; and
  • The remainder for potential future research and development programs, including its share of development costs for additional therapeutic targets AAVL may choose to pursue under its collaboration with Regeneron, as well as capital expenditures, working capital and other general corporate purposes.

Disclaimer: This AAVL IPO report is based on a reading and analysis of AAVL'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: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

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