IPO Update: MAIA Biotechnology Targets $10 Million IPO

Summary

  • MAIA Biotechnology has filed proposed terms for its IPO.
  • The firm is developing treatment candidates for various cancers.
  • MAIA is preparing to enter Phase 2 trials (proof of concept) for its lead candidate.
  • The firm has no well-known institutional investors, the IPO price is far below the typical range and its drug development may be slow; I'm on Hold for the IPO.
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A Quick Take On MAIA Biotechnology

MAIA Biotechnology, Inc. (NYSE:MAIA) intends to raise $10 million from the sale of its common stock in an IPO, according to an amended registration statement.

The company is a clinical-stage biopharma developing treatments for various cancers.

I'm on Hold for its IPO.

MAIA Biotechnology Overview

Management is headed by Co-founder, President, CEO and Chairman, Vlad Vitoc, M.D, MBA, who has been with the firm since inception and previously 'managed and supported over 20 early, launch, and mature stage compounds, which have included targeted therapies and immune therapies across more than 25 tumor types.'

The firm's lead candidate, THIO-101, is preparing to enter Phase 2 trials for the treatment of non-small cell lung cancer (NSCLC).

Its second candidate, THIO-102, is in Phase 2 trial planning for treating colorectal cancer.

Below is the current status of the company's drug development pipeline. MAIA has booked fair market value investment of $40.9 million as of March 31, 2022 from investors including individuals including Frank Perabo and Jerry Shay.

MAIA's Market & Competition

According to a 2017 market research report by Grand View Research, the global market for non-small cell lung cancer was valued at an estimated $6.2 billion in 2016 and is forecast to reach $12 billion by 2025.

This represents a forecast CAGR (Compound Annual Growth Rate) of CAGR (Compound Annual Growth Rate) of 7.5% from 2018 to 2025.

Key elements driving this expected growth are an increase in air pollution and continued widespread use of cigarettes and other carcinogenic products.

Also, the NSCLC market has a strong pipeline of new treatments being developed by a variety of biopharma firms and major pharma companies which is slated to drive growth in the market in the years ahead.

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

  • Merck

  • Regeneron

  • Eli Lilly & Co.

  • Roche

  • Philogen

  • Chiome Bioscience

  • ImmunoGen

  • Vincerx Pharma

  • MacroGenics

  • Byondis

MAIA Biotechnology's Financial Status

The firm's recent financial results are typical of a development stage biopharma in that they feature no revenue and significant R&D and G&A expenses.

Below are the company's financial results for the past two calendar Q1 periods:

Statement of Operations

Statement of Operations (SEC EDGAR)

As of March 31, 2022, the company had $10.3 million in cash and $2.4 million in total liabilities.

MAIA's IPO Details

MAIA intends to sell 1.66 million shares of common stock at a proposed midpoint price of $6.00 per share for gross proceeds of approximately $10.0 million, not including the sale of customary underwriter options.

No existing or potentially new shareholders have indicated an interest to purchase shares at the IPO price.

Assuming a successful IPO at the midpoint of the proposed price range, the company's enterprise value at IPO (excluding underwriter options) would approximate $42.9 million.

The float to outstanding shares ratio (excluding underwriter options) will be approximately 16.31%. A figure under 10% is generally considered a "low float" stock which can be subject to significant price volatility.

Per the firm's most recent regulatory filing, it plans to use the net proceeds as follows:

approximately $4-$7 million to fund the first part of the planned Phase 2 trial of THIO for NSCLC indication (THIO-101);

approximately $1-$2 million to fund the first part of the planned Phase 2 trial of THIO for CRC, HCC, and SCLC (THIO-102)

approximately $1-$2 million to fund pre-clinical to IND development for two second-generation telomere targeting compounds;

the remaining proceeds to fund our other research and development activities, as well as for working capital and other general corporate purposes.

The net proceeds from this offering, together with our cash, will not be sufficient for us to fund any of our product candidates through regulatory approval, and we will need to raise additional capital to complete the development and commercialization of our product candidates.

(Source - SEC)

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

Regarding outstanding legal proceedings, management said the firm is not a party to any material legal proceedings.

The sole listed bookrunner of the IPO is ThinkEquity.

Commentary About MAIA

MAIA is seeking U.S. public capital market funding to enter Phase 2 trials (proof of concept study) for its lead candidates.

For its lead candidate, THIO-101, for the treatment of non-small cell lung cancer (NSCLC), the company has a clinical supply agreement with Regeneron.

The market opportunity for treating NSCLC is reasonably large and expected to grow at an elevated rate of growth as the global population ages and air quality remains bad in certain regions.

Management hasn't disclosed any major pharma firm collaboration agreements, although it has plans to enter into strategic collaboration agreements with select pharma firms with relevant immune activating therapies.

The company's investor syndicate does not include any well-known institutional life science venture capital firms or strategic biopharma investors.

ThinkEquity is the lead underwriter and IPOs led by the firm over the last 12-month period have generated an average return of negative (67.7%) since their IPO. This is a top-tier performance for all major underwriters during the period.

As for valuation, management is asking IPO investors to pay an enterprise value at IPO of around $43 million, which is well below the typical range for a biopharma firm.

While I wish MAIA well, the "proof of concept" study status for Phase 2 means the firm's development time will likely be extended, it has a lack of known institutional investors and well below-typical valuation assumptions.

I'm on Hold for MAIA's IPO.

Expected IPO Pricing Date: To be announced

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