It is if as we are back in 2010 with a new wave of IPOs and secondary offerings on Wall Street by Israeli life sciences companies. Some have failed (like D-Pharm Ltd. (TASE: DPRM)), some have thrived (like Medgenics Ltd. (AIM:MEDG; AMEX: MDGN)), and some which missed the first wave are trying to ride the current wave, the size of which is still not known.
Kamada Ltd. (TASE: KMDA) is close to an offering on Nasdaq, and yesterday, "Globes" was the first to report that Alcobra Ltd. has filed a draft prospectus with the US Securities and Exchange Commission (SEC), to reportedly raise $15-20 million at a company value of $100 million, before money. Alcobra did not disclose the number of shares it plans to offer.
Alcobra, founded in 2008, is developing MG01CI for the for attention deficit hyperactivity disorder (ADHD) - which will also be the company's ticker, if the company goes public. According to the prospectus, the Phase II clinical trial of MG01CI with 120 participants was successfully completed in September 2011, and that the company plans to carry out a Phase II/III clinical trial after the IPO. The larger clinical trial will require a heavy investment, which the IPO proceeds are intended to finance.
So far as is known, Alcobra might try a smaller private placement to improve its position ahead of an IPO. Alcobra's financial situation, like many of its peers, is not exactly exemplary. It has just $97,000 in cash; effectively nothing. According to the draft prospectus, it will need $6 million to finance the Phase II/III clinical trial in adults with ADHD, even though such combined trials are usually only carried out for orphan drugs for rare diseases.
In the draft prospectus, Alcobra says that 5-12% children worldwide suffer from ADHD, as well as 46% of adults who suffered from it in their childhood.
Alcobra's IPO is still a long way off, and it is difficult to float a company with only one product, but assuming that its valuation before money is $100 million, the paper value (gross, pretax) of the company's founders, Dr. Dalia Megiddo and Udi Gilboa, is $36 million for Megiddo's 36% stake and $35.1 million for Gilboa's 35.1% stake. Hadasit - the Technology Transfer Company of Hadassah Medical Organization owns 9.6% of the company, and CEO Dr. Yaron Daniely 26,875 options exercisable for 2% of the company at a strike price of $1.923 per share, and other options.
Published by Globes [online], Israel business news - www.globes-online.com - on January 15, 2013
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