Despite a sharp downturn in initial public offering activity, New York-based gene therapy company Lexeo Therapeutics and French biotech Abivax are seeking funding for their lead candidate programs.
Pictured: IPO concept art showing stacks of coins and an upward trendline/iStock, holwichaikawee
Genetic medicines biotech Lexeo Therapeutics and immune-focused French company Abivax both filed for their initial public offerings on Friday. Neither company specified how much they were seeking to raise in their respective SEC filings.
Lexeo, in its SEC filing, said that it will primarily use the initial public offering (IPO) proceeds to fund the development of its three main programs. These include its most advanced candidate LX2006, currently being assessed in a Phase I/II trial for Friedrich’s ataxia cardiomyopathy, and its lead Alzheimer’s disease candidate LX1001, also in Phase I/II studies. Lexeo will also use the earnings to support its arrhythmogenic cardiomyopathy candidate LX2020.
The company is anticipating readouts for all three investigational gene therapies in 2024.
Lexeo launched in January 2021 with $85 million in Series A backing and followed this up with $100 million in Series B financing in September of the same year. The gene therapy start-up uses adeno-associated virus-based precision genetic therapies to target both monogenic rare diseases and conditions with large patient populations. Once public, Lexeo will trade on Nasdaq under the ticker $LXEO.
Abivax noted in its SEC filing that it will use the IPO proceeds to advance the company’s investigational oral drug obefazimod for ulcerative colitis and Crohn’s disease. Any remaining funds will be used to help the company sustain its general corporate operations and will serve as working capital. Abivax might also channel some of its earnings for licensing and collaboration deals.
According to Abivax, obefazimod has a “differentiated” approach to treating inflammatory bowel diseases. Its mechanism of action involves the specific enhancement of the micro-RNA miR-124, a central regulator in the inflammatory response. In turn, obefazimod can simultaneously modulate multiple inflammatory pathways, which could lead to more durable effects.
Obefazimod is currently in several pivotal Phase III studies in ulcerative colitis, data are expected starting in 2025. Abivax also plans to initiate a Phase II study in Crohn’s disease early next year.
Lexeo’s and Abivax’s IPOs come amid a sharp downturn in the number of companies going public. The COVID-19 pandemic drove strong interest in the biopharma industry and in 2021, over 150 companies filed for IPOs, raising more than $25 billion in total. This year, by comparison, only about 20 IPOs have been filed, of which 12 have been completed.
David Diamond, managing director at business consulting firm CBIZ MHM, said in an interview with BioSpace that investors are more inclined to back companies that can prove that their assets are effective, often looking for data from Phase II or even later-stage studies.
Among the companies that have gone public this year are Acelyrin, raising $540 million to support its lead asset izokibep, which at the time of the IPO announcement was in Phase IIb/III studies or hidradenitis suppurativa (HS), psoriatic arthritis (PsA) and uveitis. California-based RayzeBio has also filed an IPO, seeking to fund the development of its radiotherapeutic pipeline, including its lead candidate RYZ101, currently in Phase III studies for gastroenteropancreatic neuroendocrine tumors.
Tristan Manalac is an independent science writer based in Metro Manila, Philippines. He can be reached at tristan@tristanmanalac.com or tristan.manalac@biospace.com.
