US-based biopharmaceutical company Gemphire Therapeutics has filed to raise up to $60m in an initial public offering that would provide an exit to pharmaceutical firm and licensing partner Pfizer.
Gemphire is developing treatments for dyslipidemia, a condition that increases the risk of serious cardiovascular disease. Its lead candidate, Gemcabene, was licensed from Pfizer in 2011.
The IPO proceeds will support three late-stage clinical trials for Gemcabene as well as manufacturing and preclinical study-related costs for the candidate.
The Gemcabene licensing deal gave Gemphire the rights to develop, produce, use, sell and import the drug, and in return Gemphire agreed to issue Pfizer 15% of its stock when it closed its first “arms-length series A financing”.
Gemphire closed its series A financing in March 2015, securing $5m in a round led by Blue Water Angels, at which point it issued 2.1 million shares to Pfizer.
The company raised $2.7m in convertible note financing in February 2015 and $10.6m in additional convertible note financing between July 2015 and February 2016.
As of last week, Gemphire had approximately 19.3 million shares of common stock outstanding, which would size Pfizer’s stake at roughly 10.9%.
The conversion of the debt financing into equity will expand the number of shares to roughly 26.8 million, which would dilute Pfizer’s stake to 7.8%, though that would presumably be before any other shares were issued for the IPO.
Jefferies and Cowen & Company are joint bookrunners for the offering, while Canaccord Genuity and Roth Capital Partners are also acting as underwriters.