Summer is typically a slower time for IPOs but the year overall has been sluggish for public market debuts, particularly in the biotech sector. Apogee Therapeutics and Sagimet Biosciences are bucking the trend, winning investor confidence that enabled both companies to upsize their stock offerings.
Apogee and Sagimet each priced their IPOs late Thursday. They’ll make their stock market debuts on the Nasdaq on Friday.
Apogee had the larger of the two IPOs, raising $300 million. After setting preliminary deal terms of 15.6 million shares offered in the range of $15 to $17 each, the preclinical biotech ended up offering more than 17.6 million shares at the top of the projected price range. Those shares will trade under the stock symbol “APGE.”
Apogee is jockeying for position in a crowded field of immunology and inflammation drugs. The company aims to stand apart currently available biologic drugs by offering patients a dosing advantage. Whereas many biologics must be injected or infused every other week to every four weeks, Apogee is developing drugs that could extend the dosing interval to every two to three months.
Apogee was founded by investors Fairmount Funds and Venrock. Last year, it spun out of Paragon Therapeutics, the biologic drug discovery engine of Fairmount Funds. Its lead program, APG777, is in development for atopic dermatitis, an inflammatory skin disorder already addressed by Dupixent. That blockbuster biologic drug from Regeneron Pharmaceuticals and Sanofi is administered every two to four weeks.
APG777’s advantage is antibody engineering that gives it a longer half-life. The company only has preclinical data for the molecule so far. Much of the IPO cash will finance plans to generate human data. In the second half of this year, the company plans to begin a Phase 1 study enrolling healthy volunteers in Australia. Preliminary data could become available in mid-2024. If positive, Apogee plans to proceed to Phase 2 testing in atopic dermatitis. The company said in its IPO filing that it may also explore other immunology and inflammation indications.
Between $110 million and $115 million is earmarked for clinical development of APG777. Another $65 million to $70 million is budgeted for preclinical development of APG808, which goes after a different target for potential treatment of chronic obstructive pulmonary disease. Apogee aims to bring this drug through Phase 1 development and the start of Phase 2 testing. Additional cash will support the development of two other antibodies, both of which are preclinical.
San Mateo, California-based Sagimet was able to raise $85 million by boosting its deal size to 5.3 million shares priced at $16 each. The company had initially planned to offer nearly 4.7 million shares in the range of $15 and $17 apiece. The company’s stock symbol is “SGMT.”
Sagimet is one of several companies developing treatments for nonalcoholic steatohepatitis, the fatty liver disease more commonly referred to as NASH. The disease currently has no FDA-approved therapies. Intercept Pharmaceuticals recently fell short in its bid to commercialize the first one. Other companies have NASH drugs in various stages of clinical development. Sagimet aims to stand apart from the pack by addressing NASH in a different way, targeting dysfunctional metabolic pathways caused by overproduction of palmitate, a fatty acid. Its lead drug candidate, denifanstat, is a fatty acid synthase inhibitor.
Interim Phase 2b data were presented last fall during the American Association for the Study of Liver Diseases annual meeting. The results showed a 34% reduction in liver fat and a 67% responder rate at 26 weeks compared to baseline. Sagimet hopes the liver fat reductions translate into improvement in the liver itself. Preliminary results from liver biopsies are expected in the first quarter of next year.
As of the end of the first quarter of this year, Sagimet reported a cash position of $25.2 million. That cash and the IPO proceeds will go toward denifanstat’s clinical development. The company has budgeted $65 million to continue Phase 2b testing of drug in NASH. Sagimet will also manufacture more of the drug as it starts preparatory work for a planned Phase 3 study.
Photo: Stephanie Keith/Bloomberg, via Getty Images
