Vividion Therapeutics Begins U.S. IPO Effort

Summary

• Vividion Therapeutics has filed to raise $100 million in an IPO, although the final figure may differ.
• The firm is developing genetic treatment candidates for cancers and immune system diseases.
• VVID has an impressive investor syndicate and major pharma collaboration deals.
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Quick Take

Vividion Therapeutics (VVID) has filed to raise $100 million in an IPO of its common stock, according to an S-1 registration statement.

The company is a preclinical stage biopharma discovering treatment candidates for cancer and immune diseases.

VVID is a fairly unique ultra-early-stage biopharma with multiple collaborations and a very strong investor syndicate.

I'll provide an update when we learn more about the IPO.

Company & Technology

San Diego, California-based Vividion was founded to use novel discovery technologies to target disease-causing proteins for various cancers and immune conditions.

Management is headed by Chief Executive Officer Jeffrey S. Hatfield, M.B.A., who has been with the firm since November 2020 and was previously CEO of Zafgen before its merger with Chondrial Therapeutics.

Below is a brief overview video of loss of function mutations via KEAP1/NRF2 pathway:

(Source)

The firm's lead program is in pre-Phase 1 stage for the treatment of NRF2 mutant cancers, inflammatory bowel disease, and chronic kidney disease.

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

(Source)

Investors in the firm have invested at least $267 million in equity investment and include ARCH Ventures, Versant Ventures, CHP, and Nextech Oncology.

Market & Competition

According to a 2021 market research report by Absolute Reports, the global market for cancer gene therapy was an estimated $558 million in 2019 and is expected to exceed $16.5 billion by 2030.

This represents a forecast CAGR (Compound Annual Growth Rate) of 32.6% from 2020 to 2030.

Key elements driving this expected growth are high success rate during trial activities including potentially lower side effects and faster recovery times.

Major competitive vendors that provide or are developing related treatments include:

• Frontier Biosciences

• Arvinas (ARVN)

• Scorpion Therapeutics

• Nurix Therapeutics (NRIX)

• C4 Therapeutics (CCCC)

• Kymera Therapeutics (KYMR)

• Relay Therapeutics (RLAY)

Financial Status

Vividion’s recent financial results are atypical of a preclinical biopharma in that they feature significant collaboration revenue recognition due to its relationship with Bristol Myers Squibb (BMY).

Below are the company’s financial results for the past two and 1/4 years:

(Source)

As of March 31, 2021, the company had $172 million in cash and $158 million in total liabilities.

IPO Details

Vividion intends to raise $100 million in gross proceeds from an IPO of its common stock, although the final figure may vary.

No existing shareholders have indicated an interest to purchase shares at the IPO price, although this element may become a feature of the IPO if disclosed in a future filing.

Management says it will use the net proceeds from the IPO as follows:

to advance our deep and diversified pipeline of highly selective small molecule therapeutics in oncology and immunology;

to fund our proprietary chemoproteomic platform technology and expand our custom-built library of chemical scaffolds and CRGs; and

the remaining proceeds for working capital and general corporate purposes, which may include hiring additional personnel to build organizational talent, capital expenditures and the costs of operating as a public company.

(Source)

Management’s presentation of the company roadshow is not available.

Listed bookrunners of the IPO are J.P. Morgan, BofA Securities, and Jefferies.

Commentary

Vividion is seeking public capital market investment to continue its discovery and pre-IND efforts.

The firm’s lead candidates are still in selection phase for various cancer and immune system disorders.

The market opportunities for genetic treatments of cancers are expected to grow at a very high rate of growth as the regulatory bodies become more familiar and comfortable with genetic treatment options.

The company has strong collaboration deals with Bristol Myers Squibb and Roche (OTCQX:RHHBY), which are significant positives in its favor.

The company’s investor syndicate includes widely recognized institutional life science venture capital firms.

J.P. Morgan is the lead left underwriter and IPOs led by the firm over the last 12-month period have generated an average return of 22.6% since their IPO. This is a mid-tier performance for all major underwriters during the period.

VVID is a fairly unique ultra-early-stage biopharma with impressive collaborations and a very strong investor syndicate.

When we learn more about the IPO, I’ll provide a final opinion.

Expected IPO Pricing Date: To be announced.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such 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.

Investing in IPOs is an inherently volatile and opaque endeavor. My research is focused on identifying quality IPO companies at a reasonable price, but I’m wrong sometimes. I analyze fundamental company performance and my conclusions may not be relevant for first-day or early IPO trading activity, which can be highly volatile and unrelated to company fundamentals. This report is intended for educational purposes only and is not financial, legal or investment advice.