The IPO of Israeli pharmaceuticals company PolyPid, which was to have taken place on Nasdaq on Friday, did not go ahead. The company postponed the offering because of market conditions among other things. PolyPid sought to raise $75 million at a company valuation of $370 million. The Nasdaq Biotechnology index, one of the main indicators of the market's receptivity to biotech offerings, fell 2.5% on Thursday, after declining throughout the week. All the same, Dropbox, admittedly not a biotech company, completed on of the largest technology offerings in recent years on Nasdaq on Thursday.
If PolyPid's IPO plans are revived in the near future, it will probably take place at a slightly lower valuation. The underwriters are Goldman Sachs, Cantor Fitzgerald, and Cowen & Co.
PolyPid was ready to make an IPO in 2014, but withdrew, raised money in a private placement, and returned to the market stronger after four years. The company has, however, been burning cash at a high rate, a rate expected to rise if it undertakes large trials. Last year, the company burnt $12 million, and at the end of 2017 it had $18 million cash. It most recent private placement was in 2016, when it raised $22 million at a valuation of $82 million.
The main shareholders in PolyPId are Morris Kahn's Aurum Ventures (18.3%), Shavit Capital (9.1%), Xenia Venture Capital Ltd. (TASE:XENA) (6.1%), and Eitan Kyiet, Haim Hurvitz (through the CHealth investment company), and Leon Recanati, all of whom have small stakes.
PolyPid's product is an antibiotic packed in a matrix of polymers (plastic-like molecules) and lipids (fat molecules), from which the company's name is derived. The poly-pid is broken down and releases a specific dosage for a period of time that can continue as long as several months, thereby preventing infection in the affected area (after surgery or a fracture, for example), without taking antibiotics orally or intravenously during that period, and without any need for repeated surgery to replace an implant releasing an antibiotic locally. The fact that the antibiotic is administered continuously in the area of the wound may also improve its effectiveness. The company will try to prove this in its clinical trials. PolyPid also believes that its product can be used as a platform for local treatment with a variety of drugs, in addition to antibiotics, for example anti-inflammatory drugs or anti-cancer drugs.
Published by Globes [online], Israel business news - www.globes-online.com - on March 25, 2018
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