Stealth BioTherapeutics, a US-based biopharmaceutical company backed by an affiliate of conglomerate Nan Fung, has set the terms for an initial public offering, setting a $12 to $14 range for its shares.
The company will issue 6.2 million American Depositary Shares (ADSs), each representing 12 ordinary shares, on the Nasdaq Global Market to raise between $74.4m and $86.8m. If the underwriters take up an option to purchase an additional 930,000 more ADSs, the IPO’s size would increase to $99.8m.
Founded in 2006 as Stealth Peptides before rebranding in 2015, Stealth is working on treatments for rare genetic and age-related diseases characterised by mitochondrial dysfunction.
Mitchondria are present in every cell except red blood cells and generate 90% of the energy required by cells. Stealth’s lead candidate, elamipretide, is being developed to target several diseases, including primary mitochondrial myopathy, which causes debilitating muscle weakness.
Elamipretide is also aimed at Barth syndrome, the symptoms of which include heart muscle weakness; Leber’s hereditary optic neuropathy, which causes central vision loss; and dry acute macular degeneration, which leads to distorted and blurred vision.
Stealth plans to evaluate a second candidate, SBT-20, for indications such as peripheral neuropathies, resulting from damage to the nerves that carry information from the central nervous system to the rest of the body, causing numbness, weakness and pain primarily in the hands and feet.
Elamipretide and SBT-20 are both based on research at Cornell University and Montreal Clinical Research Institute, and Cornell owns a minority stake in Stealth as part of their licensing agreement.
The company is majority-owned by investment firm Morningside Venture, which plans to purchase approximately $60m worth of ADSs in the offering, which is set to reduce its stake from 98.3% to 65.1%.
Stealth emerged with $100m in convertible note financing in June 2018 raised over two rounds, the first of which was led by Pivotal Beta, a venture capital fund operated by Nan Fung, though it is currently unclear whether those notes will be converted to equity following the offering.
The company has revealed the first round also featured BVCF Management, CMBC Capital Holdings, Kingdon Capital, Ocean Equity Partners, Sagamore Investments and funds associated with Atlantis Investment Management, while Morningside Venture led the second round as a returning investor.
Jefferies, Evercore Group, BMO Capital Markets and Nomura Securities International are the underwriters for the offering.
