Entera Bio, a portfolio company of DNA Biomedical Solutions Ltd. (TASE: DNA), has announced the filing of a draft prospectus with the US Securities and Exchange Commission (SEC) for a Nasdaq IPO. The Israeli drug development company is thereby giving up on the negotiations it began two months ago for being merged into Nasdaq-listed company Alcobra, which has tens of millions of dollars in cash. Alcobra decided to hold a competitive process for selecting a company to be merged into it, while Entera Bio preferred going ahead by itself to waiting.
The share price of DNA Biomedical, which holds 36% of Entera Bio's shares, was up 3%, putting that company's market cap up to NIS 43 million. Enteral Bio has been considering an IPO since 2015, but was probably waiting for the right market conditions, and for good results from its initial human trial.
The amount to be raised in the offering, probably in the tens of millions of dollars, will be used to pay for Phase II/III trials for Entera Bio's drug for treatment of orphan disease Hypoparathyroidism. Since the disease is an orphan disease, the amount raised may be enough to complete the trial.
On Thursday, DNA Biomedical reported that Capital Point had agreed to provide it with $3 million in financing that would enable it to participate in future financing rounds by Entera Bio. The document indicates that Entera Bio is planning a $10 million private placement, followed by an IPO.
Since the money from the IPO can be used to start the company's trial in early 2018, it appears that Entera Bio will attempt its IPO this September. If the market is not amenable, the company can still register the shares from the private placement for trading. The document also indicates that Entera Bio is aiming at a $75 million company value (after money) for its IPO.
Entera Bio's drug is designed for treatment of disorders in the parathyroid gland, which cause problems in bone formation that could lead to bone fractures. The company is also developing a drug for treatment of osteoporosis. Both drugs are scheduled to enter Phase II trials in 2017, according to DNA Biomedical's 2016 financial statements, but as often happens in this sector, things have been delayed, and the first trial is now expected to take place in 2018.
Entera Bio raised $6 million at a company value of $28.5 million, after money, in a financing round in 2015, which it called a bridging round in preparation for a Nasdaq IPO. The company also raised a $7.5 million loan convertible into shares in 2016.
The principal shareholders in DNA Biomedical are Zeev Bronfeld (15%), Menahem Raphael (6%), and CEO Yonatan Malca (5%). Oramed (Nasdaq: ORMD) has a 6% stake, because the original technology used in Entera Bio's product was developed at Oramed. Other shareholders in Entera Bio include the Pontifax fund and private investors, including Kite Pharma founder and CEO Prof. Arie Belldegrun.
Published by Globes [online], Israel Business News - www.globes-online.com - on July 16, 2017
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