Atea Pharmaceuticals Proposes Terms For $253 Million IPO

Summary

• Atea Pharmaceuticals intends to raise $253 million in a U.S. IPO of its common stock.
• The firm is developing treatments for virus-borne diseases such as Covid-19 and Hepatitis C.
• AVIR has shown positive safety trial results for its Covid-19 treatment, but we won't have efficacy data until 1H 2021.
• The IPO is priced far higher than the typical range for clinical biopharma firms at IPO, so I'll watch it from the sidelines.
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Quick Take

Atea Pharmaceuticals (NASDAQ:AVIR) has filed to raise $253 million in an IPO of its common stock, according to an S-1 registration statement.

The company is a clinical stage biopharma developing therapeutics for virus-borne diseases such as Covid-19 and others.

AVIR has produced positive safety trial results but the IPO appears excessively valued, so I'll pass on the IPO.

Company & Technology

Boston, Massachusetts-based Atea was founded to develop treatments for virus-borne diseases such as Hepatitis C, Dengue and more recently Covid-19.

Management is headed by founder, president, CEO and Chairman Jean-Pierre Sommadossi, Ph.D., who was previously co-founder at Idenix Pharmaceuticals.

Below is a brief overview video of Hepatitis C:

Source: Johns Hopkins Medicine

The firm's lead candidate, AT-527, is being developed for the treatment of the Covid-19 virus, SARS-CoV-2.

Management expects to report Phase 2 interim safety data by the end of 2020 and initiate Phase 3 outpatient trial by 1H 2021.

Below is the current status of the company’s drug development pipeline:

Source: Company S-1 Filing

Investors in the firm have invested at least $69 million and include JPM Partners, Morningside Investments, Cormorant and Bain Capital Life Science Investors.

Market & Competition

The global market for a successful Covid-19 treatment is difficult to quantify, but is likely to be well above $20 billion per year, as diagnostics and detection kits markets are $17 billion and $4.6 billion each, respectively.

Key elements driving this expected growth are continued expansion of the number of persons infected by the virus across the globe.

Also, there are several parts to the treatment market, including:

• Antiviral medicine

• Plasma therapy

• Immunotherapy

• Life support

• Others

Major competitive vendors that provide or are developing Covid-19 treatments include:

• Gilead Sciences (GILD)

• Fujifilm Pharma

• Ridgeback Biotherapeutics

• Regeneron Pharmaceuticals (REGN)

• Eli Lilly (LLY)

• Others

Financial Status

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.