By Mitchell Young
New Haven: Biohaven Pharmaceuticals founded in 2013, is developing treatments for neurological diseases and rare disorders, announced terms for its IPO. The company plans to raise $125 million by offering 8.3 million shares at a price range of $14 to $16 and will be listed on the NYSE, with the symbol BHVN.
Insiders will reportedly purchase $70 million worth of shares in the offering (56%), providing the company a fully diluted market value of $546 million [at the midpoint of the IPO range]. Morgan Stanley, Piper Jaffray and Barclays are the joint underwriters, and the stock is expected to price during the week of May 1, 2017.
The “start-up” biotech is run by pharmaceutical veterans Vlad Coric, M.D., CEO and Declan Doogan, MD, Chairman. Doogan was the Senior Vice-President and Head of Worldwide Development at Pfizer and Coric was Group Director at Bristol Myers Squibb and an Associate Professor at Yale School of Medicine. Going into the IPO, another biotech run by Declan, Portage Pharmaceuticals, was the largest investor in the company owning 28%.
Last fall a group of private investors, added $80 million to the company coffers in a financing led by the venture capital firms Venrock, RA Capital Management, Vivo Capital, Aisling Capital, Rock Springs Capital, John W. Childs, Knoll Capital Management, Osage University Partners, Aperture Venture Partners, Connecticut Innovations, Greg Bailey and Litmore Capital, and what the company than said were two undisclosed “blue chip” pharmaceutical companies. Biohaven’s announcement at the time said the offering was “oversubscribed.”
Biohaven operates as a holding company and as a development company and has created a diverse portfolio of potential drugs and drug platforms through investments and licensing. In conjunction with the IPO the company revealed that it has previously entered licensing agreements for drugs from both AstraZeneca [NYSE:AZN] and Bristol-Myers Squibb [NYSE: BMY] In both cases the company was moving drugs into clinical development and trials that the pharma giants had placed on their back shelves.
The BMY drug is a therapy for migraine headaches, the drug licensed from AstraZeneca is an NMDA antagonist developed to treat depression. Biohaven also has licensing and drug development agreements with Yale University, Massachusetts General Hospital and Rutgers University.
The company says its role is to apply its “expertise in late stage clinical development” to bring drug development forward.
As we previously reported the FDA gave the company the Orphan Drug status last summer and the authority to begin a clinical trial for a drug to treat Spinocerebellar Ataxia [SCA], a rare, debilitating neurodegenerative disorder that is estimated to affect approximately 150,000 people in the United States with no other drug treatments.
Biohaven made a large investment in September 2016, in New Haven’s Kleo Pharmaceuticals.
Kleo’s CEO and Co-founder, David Spiegel, is Professor of Chemistry and Pharmacology at Yale University where he heads the Spiegel Research Group and has received wide acclaim and awards for his lab’s research.
Biohaven’s investment in Kleo will help the company develop its “novel” “Antibody Recruiting Molecules” (ARMs) and “Synthetic Antibody Recruiting Molecules” (SyAMs). Both drug platforms are considered by the companies as able to create entirely new drug types.