Hookipa is advancing a pipeline of immunotherapeutics for infectious diseases and cancers.
HOOK has generated promising trial results for its lead candidate, has a multi-program collaboration partnership with Gilead (NASDAQ:GILD), and the IPO appears reasonably valued.
Company And Technology
New York-based Hookipa was founded in 2011 to develop therapeutics that use the patient’s immune system to induce a powerful killer T cell response for the treatment of infectious diseases and cancer.
Management is headed by CEO and Director Jörn Aldag, who has been with the firm since inception and was previously CEO at uniQure N.V.
Hookipa has developed VaxWave, a replication-deficient viral vector, and TheraT, an attenuated replicating vector that target dendritic cells in vivo and activate the immune system to induce a response of antigen-specific killer T cells and antibodies.
Hookipa’s lead drug candidate HB-101, based on the VaxWave technology, is currently being evaluated in a Phase 2 clinical trial for the prevention of cytomegalovirus infections.
Below is the current status of the company’s drug development pipeline:
Source: Company website
Investors in Hookipa include Sofinnova Partners, Forbion, HBM Partners, Hillhouse Capital, BioMed Partners, Gilead, Boehringer Ingelheim, Takeda Ventures, and Invus, Redmile Group.
Market And Competition
According to a 2018 market research report by Research and Markets, the market for treatment of Cytomegalovirus (CMV) infections in the seven major markets was found to be $840.6 million in 2016.
The CMV infections total sero-prevalent population was estimated to be around 162.8 million in the US for 2016.
Major competitors that are developing related treatments include:
- Gritstone Oncology (GRTS)
- bluebird bio (BLUE)
- Neon Therapeutics (NTGN)
- Replimune Group (REPL)
- Bristol-Myers Squibb (BMY)
- Immune Design (IMDZ)
HOOK’s recent financial results are typical of a development stage biopharma in that they feature significant R&D and G&A costs associated with advancing its pipeline of treatment candidates.
In 2018, the firm received some collaboration and licensing revenue from its collaboration with Gilead.
Below are the company’s financial results for the past two years (Audited PCAOB):
Source: Company registration statement
As of December 31, 2018, the company had $48.6 million in cash and $23.9 million in total liabilities (unaudited, interim).
HOOK intends to sell 6.66 million shares of common stock at a midpoint price of $15.00 per share for gross proceeds of approximately $100.0 million, not including the sale of customary underwriter options.
Class A shareholders will not have voting rights but will have the right to convert to common stock at any time after the IPO.
Certain existing shareholders have indicated an interest to purchase shares in the aggregate of up to $40.0 million. This is a positive signal to prospective IPO investors and is typical of successful IPO transactions for life science companies.
Assuming a successful IPO at the midpoint of the proposed price range, the company’s enterprise value at IPO would approximate $391 million.
Excluding effects of underwriter options and private placement shares or restricted stock, if any, the float to outstanding shares ratio will be approximately 25.6%.
Per the firm’s latest filing, it plans to use the net proceeds from the IPO as follows:
to advance HB-101 through completion of our ongoing Phase 2 clinical trial;
to advance HB-201 and HB-202 into and through completion of Phase 1 clinical trials;
to advance HB-301 into and through completion of a Phase 1 clinical trial;
for ongoing research and development activities related to next generation programs; and
the remainder for working capital and other general corporate purposes.
Management’s presentation of the company roadshow is not available.
Listed underwriters of the IPO are BofA Merrill Lynch, SVB Leerink, RBC Capital Markets, and Kempen.
Expected IPO Pricing Date: April 17, 2019.
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