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Microlin Lowers IPO Price Range as it Continues to Seek a Public Listing

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NEW YORK (GenomeWeb) – Microlin Bio is pushing ahead with its bid to go public on the Nasdaq, disclosing last week that it now expects to float roughly 4.3 million shares for between $6.50 and $7.50 apiece, which would raise as much as $32.3 million for the microRNA therapeutics and diagnostics startup.

The new initial public offering guidance brings Microlin back down near the $6 to $8 per share range it had projected in February, when it first filed to go public through the sale of 3.6 million shares. It also represents an approximately 35 percent cut to the $10 to $12 range it had been considering a couple of months later, when it was planning on selling 2.7 million shares.

Based on a $7 per share IPO and the 8.4 million shares expected to be outstanding after the transaction, Microlin's market cap would be approximately $59 million. At $11 per share — the midpoint of its previous price-per-share guidance — its valuation would have exceeded $92 million.

In further tinkering with its proposed offering price, Microlin and the IPO's underwriters are hoping to find the sweet spot for investors willing to take a stake in a company with essentially no operations and whose biggest asset is its exclusive access to a portfolio of 132 patents and 138 patent applications licensed from Ohio State University.

Indeed, Microlin currently has a single employee — Founder, CEO, and Chairman Joseph Hernandez — with other members of its executive team only agreeing to come onboard should the company complete its IPO. They include CSO Nicholas Dean, former director and executive vice president at Isis Pharmaceuticals; former Isis Director of antisense drug discovery and Regulus Therapeutics Co-founder Eric Marcusson, who will serve as Microlin's head of preclinical drug discovery; and Jeffrey Jensen, one-time head of clinical development at Isis spinoff Excaliard Pharmaceuticals who will lead clinical development at Microlin.

Meanwhile, Microlin has almost no operations to speak of. In a filing with the US Securities and Exchange Commission, the company said it has conducted some in vitro and in vivo work with its lead lung cancer drug, but that this work has been "fairly limited."

Future research and development work, it added, will be outsourced to contract research organizations and OSU collaborators should it complete its IPO.

Microlin was founded in October 2013 around an in-licensed intellectual property estate largely developed in the labs of OSU's Carlo Croce and Robert Lee, both of whom are members of the company's scientific advisory board.

From the start, the firm has set its sights high, taking aim at both miRNA-based therapeutics and companion diagnostics.

Its lead drug candidate is called Lumiralin and it is designed to silence miR-21 to treat non-small cell lung cancer. Microlin said it expects to file an investigational new drug application on the agent by the end of this year, with Phase I testing being conducted at OSU.

Earlier-stage drugs include the ovarian cancer therapy Omiralin, which mimics miR-484; Colomiralin, which inhibits miR-17-5p to treat colorectal cancer; and Promiralin, a miR-34 mimic for prostate cancer. The therapeutics are expected to make use of a novel delivery technology called QTsome, which was developed by OSU's Lee and comprises two cationic lipids, one with a quaternary amine headgroup and the other with a tertiary amine headgroup, along with a polyethylene glycol conjugate.

Microlin is further hoping to develop miRNA-based diagnostics for all four indications, beginning with a blood-based test for ovarian cancer called Omira. Also in the company's diagnostics pipeline is Lumira to determine lung cancer risk and aggressiveness; Colomira to diagnose colon cancer and determine its aggressiveness; and Promira to identify prostate cancer patients who require aggressive surgical intervention and those who simply need to be monitored.

But it remains to be seen whether an IP portfolio and promises of multiple clinical candidates is enough to woo investors. Thus far, only two other players in the miRNA space have managed to go public — Rosetta Genomics and Regulus Therapeutics.

Rosetta first filed for its IPO in 2006, originally hoping to sell its stock for between $11 and $13 each. That number was later cut, and the company's shares hit the Nasdaq at $7 in early 2007.

Similarly, Regulus had expected to float for much higher than it actually did, targeting a $10 to $12 per share range. It ultimately settled for $4 a share in 2012, although it boosted the number of shares offered in order to maintain the overall value of the transaction.

Notably, both Rosetta and Regulus were fairly well established prior to seeking a public listing.

For instance, by the time of its IPO, Rosetta had built a proprietary bioinformatics platform that it used to identify hundreds of human miRNAs on which it filed its own patent applications and was less than two years away from launching its first diagnostic.

And Regulus, which was created as a joint venture between Isis and Alnylam Pharmaceuticals, had a number of drug-development programs ongoing at the time it went public, including ones with big pharma partners GlaxoSmithKline, Sanofi, and AstraZeneca. It also had cash reserves of nearly $100 million.

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