Biotechs hit the road

NEW YORK, April 28 (IFR) - Orphan drug developer Biohaven Pharmaceuticals' proposed US$133m IPO represents the largest attempt at a biotech new listing this year.

Morgan Stanley (Xetra: 885836 - news) , Piper Jaffray and Barclays (LSE: BARC.L - news) are marketing 8.3m shares at US$14-$16 for pricing on May 3.

Existing shareholders led by Aisling Capital, RA Capital Management, Venrock and Vivo Capital have committed to invest up to US$70m as part of the IPO, perhaps diminishing the significance of its size.

The company completed a US$80m crossover funding round in February at US$9.29 per share.

Biohaven follows biotech billionaire Vivek Ramaswamy's model of developing drugs that were cast off from large pharmaceutical firms. Ramaswamy's company Axovant is developing an Alzheimer's disease drug it acquired from GlaxoSmithKline (Other OTC: GLAXF - news) .

In a similar agreement, Biohaven paid US$9m to Bristol-Myers Squibb for the rights to one drug entering two Phase III trials and another in pre-clinical development.

If the drugs are commercially successful, Biohaven would pay up to US$350m in milestones.

Proceeds from the IPO, when combined with US$62.2m of current cash reserves, are enough to keep the company well funded through the next 15 months, according to the prospectus.

Biohaven expects to publish top-line data from both of its lead drug candidates by the end of Q1 2018.

Ovid Therapeutics, an orphan drug specialist that is focused on neurological disorders, is looking to raise US$85m in its IPO. Citigroup (NYSE: C - news) and Cowen are marketing 5m shares at US$15-$17 for pricing on May 4 after the close.

Insiders have put in a request for up to US$20m of shares sold. Takeda is Ovid's largest shareholder with a 9.1% interest. The Japanese pharmaceutical firm acquired its stake in January when Ovid issued US$25.9m of convertible preferred shares at US$14.513 apiece.

The Takeda collaboration provides Ovid with development rights to the drug OV935 as a potential epilepsy treatment.

Ovid's lead drug candidate OV101 is a potential treatment for neurodevelopmental disorders Angelman Syndrome and Fragile X Syndrome. Both disorders are typically diagnosable in early childhood and require full-time care for the patients affected.

Ovid finished 2016 with US$51.9m of cash reserves, about a year's funding according to the prospectus. Proceeds extend the company's cash to US$123.5m as it looks to fund Phase II studies of OV101 and OV9355 through to completion. (This story will appear in the April 29 issue of IFR Magazine)