Israeli clinical biopharmaceutical company 89bio Inc. has filed a preliminary prospectus with the US Securities and Exchange Commission (SEC) to raise $70 million on Wall Street in an Initial Public Offering (IPO). 89bio is developing treatments for liver and cardio-metabolic diseases. The underwriters are Merrill Lynch, SVB Leerink, RBC Capital Markets and Oppenheimer & Co.
89bio is in effect a spin-off of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA). Teva inherited what is now bio89's lead product candidate, BIO89-100 for the treatment of nonalcoholic steatohepatitis (NASH) - a severe form of nonalcoholic fatty liver disease - in one of its acquisitions. Even though the product was not part of Teva's core focus on neurology, oncology and women's health, the Israeli pharmaceutical company was reluctant to relinquish the drug and it continued allocating funds for its development.
However, when Teva became mired in cash flow difficulties following the debt it took to buy Actavis in 2015, it decided to spin it off into a separate company and retain certain rights. 89bio has already paid Teva $6 million and is committed to paying up to a further $135 million and royalties, if the product reaches the market and is commercially successful.
89bio was founded in Israel but recently moved its headquarters to San Francisco although its development center remains in Herzliya. 89bio's chief operating officer and chief business officer is Dr. Ram Waisbourd the former VP strategy at Teva. One of the company's directors is former Teva CSO Dr. Michael Hayden. The company has 14 employees in the US and Israel. 89bio's CEO is Rohan Palekar a former CEO of US company Avanir, which developed two drugs and was sold in 2015 for $3.5 billion.
In 2018, 89bio raised $60 million led by OrbiMed Israel together with OrbiMed US and Longitude Capital, and joined by RA Capital Management and Pontifax.
The fatty liver disease (nonalcoholic steatohepatitis or NASH) market is a huge medical market with no drug solution. It is a complex metabolic disorder that causes fat buildup in the liver, as well as inflammation and eventually fibrosis, and it can worsen to cirrhosis and liver failure. NASH affects more than 16 million adults in the US. The exact cause of NASH is unknown, but it is commonly found in people with obesity and type 2 diabetes.
89bio's drug has successfully passed a Phase I human clinical trial. The trial was conducted on healthy individuals so that while the effect on patients cannot yet be gauged, it was shown that it improved the fat profile of the volunteers. First results from a trial on fatty liver patients are expected in the second half of 2020.
The swift and smooth entry of the product into clinical trials was made possible because the product was developed by Teva, and part of the Teva team continued working on the product with 89bio.
In the first half of 2019, the company's operating expenses amounted to $8.1 million.
Published by Globes, Israel business news - en.globes.co.il - on October 13, 2019
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