Chiasma raises $102m in Nasdaq IPO

Roni Mamluk
Roni Mamluk

The Israeli company, which is developing an injectable treatment for acromegaly, rose 25% on its first day trading.

Israeli drug development company Chiasma Inc. raised $102 million in its Nasdaq IPO on Thursday. The company sold 6.3 million shares at $16, above the range it was aiming for, and saw its share price increase 20% on its first day trading to $20, giving a market cap of $562 million. Chiasma is trading under the CHMA ticker.

The IPO came just three months after Chiasma raised $70 million in a private placement.Chiasma recently submitted a request for marketing approval of its drug for treatment of acromegaly. The request was made independently, without partners, a unique step for both Israeli pharmaceutical companies and companies holding IPOs.

Chiasma's drug is an oral version of an existing drug marketed by Novartis for treatment of the disease. Sales of this drug and similar injectables for treatment of acromegaly total $730 million annually, while sales of all drugs for treatment of the disease total $2 billion. Injection of these drugs is considered very painful, and requires a trip to the hospital.

A clinical trial conducted by Chiasma showed that its drug, administered orally twice a day, prevented side effects like pain and irritation in the area of the injection, and also alleviated the symptoms of the disease, in comparison with the existing treatment. Chiasma is developing a number of additional products based on the same technology, so that drugs that currently require injection or an IV can be taken orally.

Chiasma's IPO is also unique, because Chiasma's leading product has already been given a price tag by Roche. This international company acquired the product in February 2013 before the Phase III trial in exchange for a $65 million advance and future payments of up to $600 million, depending on milestones and the product's success.

Roche's Phase III trial for the product was successful, but the company elected to return it to Chiasma in August 2014 instead of continuing to develop it, while calling the trial a success. Roche paid Chiasma a total of $90 million during the period of the agreement between them.

Acromegaly causes accelerated growth of the bones, due to increased emission of growth hormone caused by a benign brain tumor. One prominent patient suffering from this disease was André René Roussimoff ("Andre the Giant"), who acted in a number of films, including "The Princess Bride." Without suitable treatment, most patients die at a fairly young age due to heart complications. There are tens of thousands of patients with the disease in the US, and several hundred thousand worldwide. The cost of treatment comes to several hundred thousand dollars a year per patient.

The US Food and Drug Administration (FDA) is slated to notify Chiasma in the coming days whether its file of documents fulfills the minimum requirement for thorough testing. If the answer is positive, such testing will begin, and could take many months.

The company almost closed down twice but has raised money in recent years under former CEO and today Chief Development Officer Dr. Roni Mamluk.

Published by Globes [online], Israel business news - www.globes-online.com - on July 19, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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