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Regulus Prices IPO at $10-$12 a Share, Breaks out H1 '12 Financials


This article has been updated from a previous version to include background on previous IPOs in the RNAi/microRNA market.

Regulus Therapeutics last week disclosed that it aims to raise as much as $54 million through its planned initial public offering on the Nasdaq later this year, which would float roughly 4.5 million shares of the company at between $10 and $12 apiece.

In a filing with the US Securities and Exchange Commission, Regulus also stated that it will grant the underwriters of the offering the chance to buy an additional 681,818 shares, which would be worth $6.8 million to $8.1 million, depending on the price of the stock. Meanwhile, partner AstraZeneca has agreed to buy $25 million worth of Regulus stock — estimated to be around 2.2 million shares — in a separate private placement.

All told, the IPO could generate $87.6 million for Regulus, which was founded in 2007 as a joint venture between Alnylam Pharmaceuticals and Isis Pharmaceuticals (GSN 9/13/2007), should the stock go on sale at the high end of the estimated price-per-share range.

Within its SEC filing, Regulus also broke out certain of its financial data, noting that it generated almost $6.7 million in strategic alliance revenues in the first half of this year. Among the company's partners are Sanofi, which is collaborating with Regulus on four miRNA therapeutics including ones in liver cancer and kidney fibrosis (GSN 6/24/2010); GlaxoSmithKline under two alliances stuck in 2008 and in 2010 (GSN 4/17/2008 & 2/25/2010); and, most recently, AstraZeneca on an atherosclerosis treatment (GSN 8/16/2012).

Regulus' operating expenses for the first six months of 2012 were $11.3 million, $9.5 million of which went to research and development with the remainder covering general and administrative costs.

The company's net loss for the half-year period was $4.8 million. As of June 30, Regulus had cash, cash equivalents, and short-term investments totaling $100.3 million.

IPOs and IP-Nos

Should it successfully close its IPO, Regulus would join the ranks of several public RNAi/miRNA companies, yet the route it is taking to get there is not a well-traveled one. In fact, among the nine publicly traded firms in the space, only two have successfully completed the IPO process — and the last one happened roughly six years ago.

The first was Alnylam Pharmaceuticals, which filed to sell its shares on the public market in early 2004 (GSN 3/5/2004). Buoyed by what was at the time perceived to be the RNAi field's most important intellectual property estate and having been the first among its peers to secure a big pharma partnership, the company boldly planned to float its shares at between $10 and $12, which would have valued the IPO at up to $86.3 million.

Alnylam's shares ultimately debuted at $6 apiece, netting around $30 million for the firm (GSN 6/4/2004). In midday trading on Wednesday, Alnylam's stock was trading at around $19.44.

Also taking the IPO path was Rosetta Genomics, which filed to go public in 2006. At that time, the company was working on both miRNA diagnostics — its current focus — and miRNA therapeutics, and aimed to sell its stock at $11 to $13 a share (GSN 9/7/2006).

Like Alnylam, Rosetta eventually set its sights a little lower, first reducing the planned price per share to $7.50 to $8.50, and eventually hitting the Nasdaq at $7 a share (GSN 3/1/2007). This week, the company's stock was selling for around $5.56 a share.

As for the other public RNAi/miRNA shops, three got their listings as private companies combining with public ones.

Silence Therapeutics began as Atugen, a private RNAi drug developer, but was acquired in 2005 by publicly traded UK firm SR Pharma (GSN 7/292005). A couple of years later, the firm changed its name to Silence, continuing to trade on the London Stock Exchange (GSN 4/5/2007).

Following a similar course was Opko Health, which was the result of a three-way merger between private RNAi drug company Acuity Pharmaceuticals, Froptix, a private developer of eye disease treatments, and Exegenics, a public shell company (GSN 3/29/2007).

The resultant company was named Opko, which continued to advance Acuity's lead drug candidate, the siRNA-based wet age-related macular degeneration treatment bevasiranib. Development of that compound was ultimately dropped on poor phase III data, and Opko has since to publicize any activities in the RNAi field. It did, however, acquire ncRNA drug firm Curna last year (GSN 2/3/2011).

The last of the three is Tekmira Pharmaceuticals, which arose from a legal dispute between privately held Protiva Biotherapeutics and one-time parent company Inex Pharmaceuticals. The two had been wrangling over ownership of Protiva's lipid nanoparticle delivery technology when, in 2006, publicly traded Inex announced that it was spinning out its assets into a new company called Tekmira.

The firms eventually settled their differences in 2008 by merging Protiva into Tekmira, which retained the public listing, and Protiva's management taking control of the new firm (GSN 4/3/2008).

Three other public RNAi companies followed a slightly different course, existing as publicly traded companies prior to beginning their work with the gene-silencing technology.

Expressed RNAi firm Benitec, for example, first began trading on the Australian Stock Exchange as an opal-mining operation called Queensland Opal. However, that company ran into financial troubles and, in 2002, it underwent a complete overhaul, shifting its focus to biotechnology.

Likewise, Arrowhead Research started off as a troubled publicly traded computer technology firm called InterActive Group. In 2002, that firm enacted a reverse stock split, changed its name to Arrowhead, and adopted a new focus on nanotechnology. Arrowhead began its RNAi activities in earnest when it established pure-play RNAi drug subsidiary Calando Pharmaceuticals (GSN 2/25/2005).

Calando has since been mostly subsumed into Arrowhead's recently acquired Madison, Wis.-based RNAi operations.

The last company on this list is Marina Biotech, which grew out of failed intranasal drug-delivery firm Nastech Pharmaceuticals. Aiming to expand into the growing RNAi field, publicly traded Nastech bought the RNAi assets of startup Galenea in 2006 (GSN 2/23/2006).

Deciding to scuttle its legacy assets, in 2008 Nastech changed its name to MDRNA and its focus to RNAi, while holding onto its public listing (GSN 5/8/2008). After acquiring Cequent Pharmaceuticals in 2010, MDRNA changed its name to Marina (GSN 7/22/2010).

Taking the most circuitous path to the public markets is RXi Pharmaceuticals, which began as a pure-play RNAi subsidiary of publicly traded CytRx in 2007. The next year, CytRx distributed RXi's stock, which began trading on the Nasdaq, to its shareholders (GSN 3/13/2008).

RXi briefly lost its public status last year when it acquired privately held peptide-based immunotherapy firm Apthera (GSN 3/31/2011). A few months later, the merged company changed its name to Galena Biopharma and shifted its RNAi operations into a subsidiary that retained the RXi name (GSN 9/29/2011).

Notably, Apthera held onto RXi's Nasdaq listing for itself. Earlier this year, Apthera spun out the RXi subsidiary into an independent company, which now trades on the over-the-counter markets as a penny stock (GSN 5/10/2012).

False Starts

There have also been a couple of false starts for RNAi/miRNA firms, including Quark Pharmaceuticals, which began toying with the idea of going public in 2007, but dropped those plans after finding Wall Street unamenable to its proposed $12 to $14 a share price (GSN 8/2/2007).

In late 2010, Quark once again filed with the SEC to go public, but again pulled the plug when it could not generate sufficient interest (GSN 9/29/2011).

Santaris Pharma, whose drug candidates primarily target mRNA but which has an miRNA-silencing drug in phase II development for hepatitis C, also considered going public about five years ago. However, the firm decided not to pursue an IPO as it closed a round of private financing (GSN 11/15/2007).