Less than a year has passed since the IPO of Alcobra Pharmaceuticals Ltd. (Nasdaq: ADHD), sources inform "Globes" that the company founders Dr. Dalia Megiddo and Udi Gilboa are preparing the IPO of another drug development company. BioBlast Pharma Ltd. has filed to raise up to $37.5 million at a company value of more than $100 million before money. The investment bank supporting the planned IPO is Aegis Capital, which was also the book-runner in the Alcobra IPO.
Alcobra, which is developing a drug for Attention Deficit Hyperactivity Disorder (ADHD), raised $25 million on Nasdaq in May 2013, in a very successful IPO, and by October the share price had risen 113%. Alcobra took advantage of the momentum to raise a further $38 million in a secondary offering and today the share price is up 160% from its IPO in May, giving a market cap of $284 million. Megiddo and Gilboa's share of Alcobra is worth $115 million in equal shares. The pair also hold 58% of BioBlast Pharma.
In contrast to Alcobra, which is based on developing one molecule, BioBlast Pharma is developing a platform of products for rare and ultra-rare genetic diseases. The company's most advanced product is in a Phase II clinical trial.
The rare genetic diseases sector is considered attractive for young biotech companies because of the relative ease for registering with the regulatory authorities. These diseases occur in very specific populations making it easy to reach patients to recruit for clinical trials, and ultimately for marketing the treatment. A small company can develop a product by itself, without the need for partners, for up to $100 million.
BioBlast Pharma has chosen an interesting approach to this sector by attempting to identify mechanisms, and potentially offer solutions for several diseases that share the same biological pathology.
The company's most developed product is Cabaletta a mutant protein stabilizing platform based on a small re-purposed molecule. Mutant unstable cellular proteins are the cause of several genetic diseases known as PolyA/Poly Q, including OPMD, SBMA and SCA3 and several others. These pathological proteins aggregate within cells, eventually leading to cell death. The company's data to date from preclinical studies from both cells and animal models, indicates that the Cabaletta platform has the potential to prevent mutant protein aggregation in humans.
The company is currently conducting a Phase II clinical trial to assess its efficacy in treating Oculopharyngeal Muscular Dystropy (OPMD). At the same time the clinical plan is being developed for two other diseases: Machado Joseph disease, or SCA3 and Kennedy’s disease, or SBMA.
Published by Globes [online], Israel business news - www.globes-online.com - on February 9, 2014
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