Proteostasis Debuts Well-Below Expected Range But Still Raises $50 Millon in IPO

February 11, 2016
By Alex Keown, BioSpace.com Breaking News Staff

CAMBRIDGE, Mass. – Cystic fibrosis drugmaker Proteostasis Therapeutics, Inc. rang the opening bell of the Nasdaq this morning and already the stock, which went public today, has dropped more than 20 percent from its opening price of $8 per share.

This morning, the company announced its initial public offering of $8 per share in an effort to raise $50 million, a step down from its initial plans to raise $86 million in an IPO, but offering half as many shares at a price of $12 to $14 per share, Xconomy reported. Proteostasis is currently trading at $6.40 per share, a rough start for the company’s first day of public trading. Still, as of the time of this, it’s early in the day and the stock could rally. This year has not been kind to pharmaceutical stocks, and several companies planning an IPO, such as Apellis Pharmaceuticals, have reconsidered due to the volatility of the marketplace.

Proteostasis said it will release 6.25 million shares of common stock at the opening price of $8. In addition, the company has granted the underwriters a 30-day option to purchase up to an additional 937,500 shares of common stock from the company at the public offering price Proteostasis is trading under the ticker symbol PTI on the Nasdaq Global Market.

Proteostasis Therapeutics is developing disease-modifying therapeutics for diseases of protein folding, trafficking and clearance. In February 2015, Proteostasis unveiled a new class of agents, CFTR Amplifiers, for the treatment of cystic fibrosis. CFTR amplifiers represent a new drug class able to enhance the effect of known cystic fibrosis transmembrane conductance regulator (CFTR) modulating agents, such as potentiators and correctors. The amplifiers are effective across CFTR mutation classes and form the basis for Proteostasis' strategy to develop a broad acting combination therapy able to serve CF patients with most mutations, the company said. When it announced the new amplifiers, Proteostasis nominated PTI130 as a clinical development candidate for the treatment of cystic fibrosis.

Proteostasis has collaborative deals with Biogen and Astellas Inc. to develop compounds that modulate the Unfolded Protein Response (UPR) through the use of Proteostasis’ proprietary “Disease Relevant Translation” and “Proteostasis Network” platform.

The cystic fibrosis market for the United States and Europe is about $5 billion annually. Although Proteostasis has forged collaborations, the company does not have any approved products and faces established challenges in the therapy field, such as Vertex ’s dual cystic fibrosis treatments Orkambi and Kalydeco. Vertex has dominated the cystic fibrosis market with its blockbuster drugs Kalydeco and Orkambi, which was approved by the U.S. Food and Drug Administration in July. Kalydeco was approved in 2012 and is aimed at a “select few” of the genetic mutations that can cause cystic fibrosis. Orkambi is the combination of Kalydeco and lumacaftor, which will be used to treat patients with the with the F508del mutation of cystic fibrosis, a mutation the lead drug cannot treat on its own. The F508del mutation is the most common genetic mutation in cystic fibrosis. Kalydeco is expected to reach about 3,900 patients by the end of this year, while Orkambi is expected to be able to treat more than 20,500 patients in the United States and the European Union.

Additionally, other companies are wedging their toes in the door, spurred on by the success of Vertex. Norwood, Mass.-based Corbus Pharmaceuticals Holdings Inc.’s lead drug candidate Resunab was granted Orphan Drug Designation for the treatment of systemic sclerosis. Lexington, Mass.-based Pulmatrix is working on its own treatment for cystic fibrosis. The company is developing PUR1900, an inhaled anti-infective to treat fungal infections associated with cystic fibrosis.