AAA AvroBio advances to public markets

AvroBio advances to public markets

US-based gene therapy developer AvroBio raised $99.7m yesterday in an initial public offering that provided an exit to pharmaceutical firm EMS, after pricing its shares at $19 on Wednesday.

The company issued approximately 5.2 million shares on the Nasdaq Global Market, and could end up securing nearly $115m if the IPO’s underwriters fully exercise their 30-day option to purchase roughly 790,000 additional shares.

The offering gave AvroBio a market capitalisation of almost $440m. Its shares briefly reached a high point of $35 on AvroBio’s first day of trading yesterday before closing at $31.20, an increase of more than 64% over the initial price.

Founded in 2015, AvroBio is developing gene therapies to treat rare diseases. Its approach relies on haematopoietic stem cells found in the bone marrow and peripheral blood that are extracted from the patient and modified to treat a condition.

AvroBio will use part of the proceeds to fund clinical trials for its lead candidate, AVR-RD-01.

AVR-RD-01 is aimed at Fabry disease, an inherited disorder caused by a build-up of fat in the body’s cells. Symptoms range from pain in the hands and feet to tinnitus, impaired vision, kidney damage and heart attacks.

The money will also go to advancing a second candidate into phase 1/2 clinical trials for the treatment of Gaucher disease, which can affect the liver, lungs, bones and, in severe cases, the central nervous system or embryonic development, causing death within days after birth.

AvroBio will also advance a treatment for Pompe disease, which impairs the proper functioning of organs, tissues and in particular muscles, into preclinical development.

A fourth treatment, aimed at cystinosis, which particularly affects kidneys and eyes but can also affect muscles, thyroid, pancreas and testes, will be advanced into an initial investigator-sponsored phase 1/2 clinical trial.

The remainder will support manufacturing and process development, research and development activities and general corporate purposes.

Brace Pharma, the strategic investment arm of EMS, participated in a $60m series B round for AvroBio in February this year, but its stake in the company was sized at less than 5% pre-offering.

The series B round was co-led by Cormorant Asset Management and Citadel Advisors unit Surveyor Capital and featured Atlas Venture, SV Life Sciences, Clarus Ventures, Aisling Capital, Eventide Asset Management and Morningside Venture Capital.

AvroBio’s largest shareholders are Atlas Venture (whose 26.6% stake has dropped to 20.6%), Clarus (12.8% post-IPO), SV Life Sciences (11.8%), Cormorant and Citadel Advisors (5.9%).

Healthcare and medical research organisation University Health Network, which had picked up a 6.5% stake after licensing its Fabry asset to AvroBio in 2016, did not have a stake of 5% or more before the offering.

Morgan Stanley, Cowen and Company, Wells Fargo Securities and Wedbush Securities are the underwriters for the offering, which is expected to close on June 25.

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