Cancer Therapeutics Via IPO 2020-2022

Goodwin tracks IPOs in the life sciences industry, with a comprehensive list of companies entering public markets during the frothy 2020-2022 time period found here. Today, I am interested in doing a first pass assessment of the pipeline potential and valuation of each of these companies. In total there were 70 therapeutics companies with core pipeline focus on cancer, and a few companies not profiled who had additional cancer programs.

After conducting this exercise, a couple of points:

• Seems like a promising Phase II asset is worth ~200 M?
• There is some urgency in drug development, as biotech’s market actually gets smaller every day as drugs get better.
• Private company valuations must be in the drain. The fact that Phase II companies with full pipelines are trading sub $300 million just makes you think what private investors are even doing in this industry. Like how are you ever supposed to make money.
• Really think a lot of these trials should be done in the academic setting. Need more physician scientist investigators to lead trials and more infrastructure at large medical centers to do GMP drug product manufacturing. Hopefully getting there soon.

2022

Acrivon Therapeutics ($ACRV): developing CHK1/2 inhibitor in licensed from Lilly, currently in Phase II. See this as a PARPi copycat. Minimal efficacy, flames out in Phase III. Hard to justify use clinically so valued fairly at ~300 M.

Arcellx ($ACLX): BCMA product success indicates potential for true platform potential and relatively facile replication in other CAR-T targets. However, given competitive landscape the upside is capped. Slightly overvalued at ~2 B.

2021

IO Biotech ($IOBT): Developing a vaccination strategy against IDO and PD-L1. I think this looks okay but clearly looks like there are some financial overhangs. All of these immmuno-oncology assets especially in melanoma are difficult to assess given the lack of head to head or understanding of where they enter the clinical landscape. Is this going to be a fourth line treatment after chemo/BRAF targeted therapy/PD-1 and other checkpoints/TILs etc… Just very hard to get a sense of where this fits in. Think this one just ends up fizzling and assets get sold off so a valuation of sub 100 M seems fair, but eventually could make a comeback as a general approach.

Aura Biosciences ($AURA): Developing virus drug conjugates. An interesting idea, and I generally see the use of viruses in cancer immunotherapy as a concept that is ripe for reemergence in the next decade. See CG Oncology. Aura seems to have carved out a very niche market but seems poised to capture it. Strong cash position out until 2025. I think this is relatively undervalued at <$500 M.

Xilio Therapeutics ($XLO): More immunooncology with tumor activated IL-2, IL-12, and CTLA-4. Its clever engineering and unfortunate that these kinds of approaches need an entire company to be built around it to see if it works. Hard to justify any sort of strong conviction.

Pyxis Oncology ($PYXS): An ADC against EDB and an Anti-Siglec-15 monoclonal antibody. Neither of these targets seems super specific so envision these drugs will simply act as slightly more targeted chemotherapy. However, the false dichotomy between broadly acting chemotherapy and super targeted therapy I think needs to go. Can certainly be an effective drug with activity against other cell types outside of strictly tumor as long as therapeutic window is demonstrated (which is only possible in clinical trials). Wait and see, more likely than not to be a zero but could surprise.

Theseus Pharmaceuticals ($THRX): I’m nowhere near a medicinal chemist and this company is doing precisely that to generate more mutation resistant TKIs. KIT, EGFR, and BCR-ABL. Will these markets be large enough to support? I think very unclear.

Immuneering ($IMRX): Dual MEK inhibitors. The Phase I was weird because there were no DLTs or SAEs. Maybe because this is a once oral medication with a plasma half life of <2 hours.

Omega Therapeutics ($OMGA): Using mRNA to target insulated genomic domains with a first target of Myc oncogene. Unfortunately doesn’t look like a drug. Flagship company.

Nuvalent ($NUVL): The assets here are good. What all the precision oncology companies aspire to be. See this getting tucked in to a large pharma after the Phase II trials read out.

Candel Therapeutics ($CADL): Hanging on to an old asset that doesn’t work. Zero soon.

Caribou Biosciences ($CRBU): Think this company is a meme and should be shut down soon. The tech is outdated and the products don’t seem to work.

Imago Biosciences ($IMGO): Acquired by Merck in November 2022 for $1.35 B.

TScan Therapeutics ($TCRX): Until we can do TCR antigen mapping with greater ease, I think all these TCR therapy companies are a bit doomed. What happens once the tumor gets immunoedited? You just spent $1 million for 2 months of OS?

Erasca ($ERAS): Lol probably a zero. Never trust a16z to run a bio company.

Elevation Oncology ($ELEV): Claudin 18 ADC looks active but I really doubt the market for this type of asset. Claudin 18 just doesn’t seem bit enough to support multiple drugs here, and it doesn’t look like ELEV’s ADC is best in class. We shall see at ASCO in a month. <$100 M market cap so whatever.

Monte Rosa Therapeutics ($GLUE): I have never seen a technology overview page with so many buzzwords. We have a yas queen platform, the Crown of drug discovery that utilizes a #degronencyclopedia and Glueomics toolbox. Biomarker driven precision medicine! Their website reminds me of the Faze Medicines website. Lead program is GSPT1 degrader which preclinically looks decent.

Ambryx Biopharma ($AMAM): A HER2 and a PSMA ADC. Went from being worth <$50 M in November 2022 to $700 M market cap today. This is partially because in 7 patients who progressed on Enhertu, 5 achieved PR on their HER2 ADC ARX788. In another dataset on their PSMA ADC ARX-517, they also demonstrated >50% PSMA clearance in 2/3 patients. Finally, Merck’s acquisition (?) of Seagen has likely contributed to the 1,400% gain in market cap. The performance of ADCs in any given patient has seemed a bit random to me and any rationalization about payload, ADC engineering or related aspects hasn’t seemed consistent to me. Given the small patient numbers, I’m inclined to say that this is potentially just noise and if you retreated with Enhertu maybe you get a similar response. On the other hand, maybe certain companies just have better manufacturing practices than others and this advantage just isn’t reflected in the reported engineering with regards to DAR, site specific conjugation, affinity, etc. The drug attached isn’t a topoisomerase inhibitor either. Weird price action, it feels like a trap.

Cyteir Therapeutics ($CYT): Targeting MCT? Zero.

Century Therapeutics ($IPSC): The only clinical program is a Phase I CD19 NK cell product derived from iPSCs. Yikes. CEO stepped down in April.

Lyell Immunopharma ($LYEL): I still think this could be very interesting despite being down like ~75% on a bet I made a couple years ago. Given the infrastructure, I think these companies will always be worth something and the upside from one of these products working is that they would seem to be an easy tuck in for a large pharma. Building a stand alone cell therapy company just seems ridiculously hard to me so the valuation given financing overhangs seems reasonable.

Janux Therapeutics ($JANX): A set of preclinical T cell engagers for >$500 M market cap, but they have >$300 M cash. The targets are PSMAxCD3, EGFRxCD3, TROP2xCD3, and PD-L1xCD28. Is there a phenomena where the more money gets pumped into a field, the value of the rest of the assets goes down? This is how I feel about IO, and maybe this explains why the biotech sector has slowed down. Some undergrad should write a thesis about it.

Day One Biopharma ($DAWN): Love this company. The assets don’t seem like anything super special, a Pan-RAF inhibitor and MEK1/2 inhibitor. Tovorafenib seems to work, albeit with pretty bad tox. Moreso, this company is a clinical development operation. The financial engineering needed to sustain these studies and support backlash to inevitably high prices for these medicines will be challenging.

Werewolf Therapeutics ($HOWL): Idk who came first but Werewolf and Xilio have the same two lead assets. Justified sub 100 M market cap.

Rain Therapeutics ($RAIN): MDM2 inhibitor! Looks horrible though. PFS 4 months.

Biomea Fusion ($BMEA): Kudos to this company for having the conviction and biological thesis around menin inhibition for a broad set of indications, not just hematologic malignancies. Interestingly, they have trials ongoing for menin inhibition in KRAS addicted tumors including pancreas cancer.

Recursion Pharmaceuticals ($RXRX): I was right 3 years ago. This company should sell its assets to the NIH to revitalize government funded research.

Achilles Therapeutics ($ACHL): The headline on the splash page for this company is AI powered precision cell therapy and that should tell you all you need to know about the quality of the science coming from this company. They have >$150 M in cash but zero.

Ikena Oncology ($IKNA): Going after TEAD and AHR. I think this one is quite interesting as the biology for these two targets is maturing. Cash runway into 2026 at just $230 M market cap.

LAVA Therapeutics ($LVTX): Gamma delta T cell engagers. Woo! Targeting CD1d by binding the antigen and the delta chain on Vγ9Vδ2 T cells. Sold for parts by 2024.

Instil Bio ($TIL): Hanging on to a thread with a clinical trial initiating in 2H 2023. Maybe genetically engineered tumor infiltrating lymphocytes were never meant to be. $80 M market cap.

NexImmune ($NEXI): An $11 M company that needs to be folded back into the academic roots that it came from. Holds several undifferentiated cell therapy products for liquid tumors.

Adagene ($ADAG): Chinese company with a set of biologic platforms for depletion of Tregs in the TiME. $65 million market cap and should stay there.

Vor Biopharma ($VOR): Vor is an interesting concept and I think eventually it may find a place to succeed. The core technology is to engineer HSCs for transplant without CD33 and dose with a CD33 depleting agent like a CAR-T or ADC. It’s a cool idea and seems to work decently.

Bolt Biotherapeutics ($BOLT): This drug isn’t active and the company should likely be shut down.

Immunocore ($IMCR): This company developed a set of T cell engagers based on HLA presented peptides instead of simply cell surface proteins. While one asset targeting gp100 in uveal melanoma was approved, the data isn’t like a checkpoint blockade where you see a long tail of survivors. Rather, with this kind of therapy it seems that you get a slowing of tumor growth and a prolonging of overall survival but unlikely to see long term survivors. This is pretty classic for these types of therapy, where the tumor will get immunoedited and afterwards, you are SOL. However, these may be nice agents to pair with chemo or targeted therapy and these combination strategies might be more fruitful in terms of reaching cure.

Sensei Biotherapeutics ($SNSE): Developing a VISTA mAb as a novel immune checkpoint, a VSIG4 mAb to deplete tumor macrophages, and a CD39 mAb to target adenosine enzyme producing cancer cells. Its a flier at sub 50 million market cap but I presume we are reaching diminishing returns with checkpoint blockade type therapies.

Cullinan Management ($CGEM): Cullinan is developing a smattering of programs without a common theme. Zipalertinib for NSCLC with EGFR exon 20 insertions, a FLT3xCD3 bispecific, and anti-MICA/B mAb, a bispecific immune activator with Harbour Biomed (?), a CD19/CD3 T cell antibody construct with HSA binding domain, and a collagen binding IL-12. All interesting assets in some capacity. Is oncology a great setting for a rollups company?

Gracell Biotechnologies ($GRCL): This is another Chinese CAR-T company with some interesting technological differentiation and we wish them all the best.

2020

BioAtla ($BCAB): BioAtla has developed a portfolio of conditionally active biologics which are based on chemical switches that turn on in the presence of the acidic tumor microenvironment. The company has developed a portfolio of these compounds against targets including AXL, ROR2, Nectin-4, B7-H4 which are all ADCs, a CTLA-4 mAb, and a set of CD3 bispecifics against EpCAM, B7-H3, and EGFR. The company is negative EV and has several clinical trial readouts in the next year. I think this could be interesting to look into further.

Nanobiotix ($NBTX): This company is developing nanoparticles that enhance the efficacy of radiotherapy and has several efficacy stage clinical trials (partnered or in academic centers). The efficacy of these is nowhere near home run material, though I predict they will have modest efficacy and get approved in some setting. The market cap of this company is sub 200 million and that seems like a good range.

Silverback Therapeutics ($SBTX): Silverback ended up merging with ARS Pharmaceuticals after the HER2 targeted TLR8 agonist failed in clinical trials. Remind you of Bolt by chance?

Kinnate Biopharma ($KNTE): Developing several kinase inhibitors including Exarafenib (Pan-RAF), an FGFR2/3 inhibitor, a brain penetrant MEK inhibitor, a c-MET inhibitor, and a CDK12 inhibitor. Negative EV though, precision oncology is tough. Exarafenib is in Phase I but the rest are preclinical.

Olema Pharmaceuticals ($OLMA): Developing an estrogen receptor antagonist that is CNS penetrant, has improved PK, and deeper ER antagonism. The Phase I data at baseline looks decent and there are several studies ongoing testing the drug as monotherapy and in combination with CDK4/6i. This type of promising Phase II asset gets you a valuation of <$300 M it seems. I think this one is worth looking into further as well, especially with >$175 M in cash.

SQZ Biotechnologies ($SQZ): The run is over for this Rob Langer biotech!

Foghorn Therapeutics ($FHTX): Foghorn is an exciting company going after novel targets and worth less than $300 M. $316 M in cash with runway through 2H 2025. It’s a Flagship company and the chromatin biology that is being targeted doesn’t seem fully mature. However, they have 2 years to figure this out and at a sub $300 M valuation, I think there is opportunity to generate excitement with some upcoming clinical readouts in AML.

Kronos Bio ($KRON): Kronos is out of Angela Koehler’s lab at MIT, and has developed a CDK9 inhibitor as a pathway to hitting the MYC oncogene. Similarly, there’s a pretty amazing cash position of just under 250 M to get to 2H 2025. The current market cap is just over 100 M. Seems like all upside from here.

Shattuck Labs ($STTK): This company has an interesting bispecific biologic platform that binds an immune checkpoint and a TNF ligand to activate adaptive immunity. The idea I guess is to cover up the immunosuppressive molecules and replace them with immunostimulatory ones. This idea is in Phase I trials in ovarian cancer and AML as a combination with backbone chemotherapy. There is data at ASCO in a month that should clarify the activity of this platform. My initial thought is that this protein complex is so huge that the PK must be pretty horrendous and that the immune agonism isn’t really that great.

C4 Therapeutics ($CCCC): C4 has degraders against IKZF1/3, BRD9, and BRAFV600. None are particularly interesting.

Oncorus ($ONCR): IND stage assets with an 8 million dollar valuation. I think the employees should do something better with their time.

PMV Pharmaceuticals ($PMVP): This is a p53 activator company worth roughly $250 M. The drug corrects the Y220C mutant of p53 and what is crazy is that it actually seems to work. There’s a dose response and the SAE profile doesn’t look too shaby. The issue is that you need to eat more than a gram of this drug every day for it to work. Anyways, I still think this is a drug and with >$200 M cash, I think this can go the distance without too much punishment for shareholders.

Prelude Therapeutics ($PRLD): This is another precision medicine company also worth roughly $250 M. The targets are CDK9, MCL1, CDK4/6, SMARCA2, and some undisclosed targets. $175 M in cash that should last until Q4 2024. The targets are worth going into, and I think this is worth further work.

Checkmate Pharmaceuticals ($CMPI): Acquired for $250 million by Regeneron in April 2022.

iTeos Therapeutics ($ITOS): I think these trials of novel immune checkpoints obviously need to be run but again it’s very difficult to understand how they fit into the new competitive landscape. In order for this to pay, it has to be the case that TIGIT and adenosine work, and everything else doesn’t. It doesn’t seem like a risk reward profile that is worth >$500 M.

Nurix Therapeutics ($NRIX): Primary assets are a set of BTK degraders. Unclear to me why degradation in this context is superior to inhibition and there are several great BTK inhibitors out there.

ALX Oncology ($ALXO): CD47 turned out to be a meme. No monotherapy in the human setting, but ALX continues on with a robust set of combination studies. See approval odds in some setting eventually at ~40% but idk how you are convincing anyone to give this without head to head trials, which logistically seem difficult to run. Why CD47 versus LAG3, TIM3, VISTA, or any of the other checkpoints is a question to me.

Relay Therapeutics ($RLAY): I’ve written a whole post about Relay and the stock is down 3 fold since then. Unfortunately, nothing seems particularly exciting, especially not somehow enabled by the supercomputing platform. At this point, Relay is just another precision oncology company, one that is maybe even overvalued at their current $1.3 billion market cap.

NKarta ($NKTX): Almost $400 M in cash but I’m not sure that I believe that the data package is competitive enough to support a commercial product. Market seems to agree, EV is almost -150 M.

Poseida Therapeutics ($PSTX): This is a 200 M company with 15 programs (2 clinical), $250 M in cash that should last into mid 2024. So they have a year to produce some clinical data and what they have is a Phase 1 MUC1 allogeneic CAR-T product and a BCMA Phase 1 product partnered with Roche. Even though this is negative EV, I see significant downside here.

Repare Therapeutics ($RPTX): Repare sits at a modest but reasonable valuation of $400 million with a robust pipeline of clinical studies currently in Phase I trials. Given that the focus in synthetic lethality, the market size is limited but each opportunity (ATR inhibition in ATM mutants, and PKMYT1 inhibition in CCNE1 amplification) are well validated.

Fusion Pharmaceuticals ($FUSN): This is a radiopharmaceuticals company focused on delivering alpha particles to cancer cells expressing IGF-1R. Hard to get too excited about this but hey Pluvicto just got approved.

Legend Biotech ($LEGN): Carvykti will become a monster. Legend has become a major success story out of China.

ADC Therapeutics ($ADCT): ADC is as the name suggests, an antibody drug conjugate company that actually got approval for Zynlonta in 2021, an ADC against CD19 for B cell malignancies. The core of the technology is a novel class of PDB dimer that blocks cell division. They say these are not substrates for drug resistance proteins. The rest of the pipeline targets CD25, CD22, KAAG1, and AXL. Zynlonta made >$70 M last year and this is a ~$200 M company so clearly some value here.

Ayala Pharmaceuticals ($AYLA): Ayala is developing gamma secretase inhibitors for rare desmoid tumors. It will compete with Nirogacestat, developed by SpringWorks. I guess the bigger issue with this company is that they literally have no money… We should probably see this fold as its unclear why anyone would run a head to head with Nirogacestat given that the market is tiny. This drug might just be left for dead.

ORIC Pharmaceuticals ($ORIC): ORIC stands for overcoming resistance in cancer and their announced programs targeting CD73, EGFR/HER2 with exon 20 insertions, PRC2, and PLK4 are all a part of this goal. They claim that the orally bioavailable CD73 small molecule is more potent than inhibition via monoclonal antibody. This is being developed in Phase 1b in multiple myeloma. The EGFR/HER2 inhibitor is differentiated primarily by brain penetrance. The PRC2 inhibitor is meant to overcome resistance to EZH2 inhibition via EZH1 bypass mutation. Finally, they position the PLK4 asset specifically in cancers with TRIM37 amplification, which may provide a somewhat derisked development pathway for an otherwise toxic drug class. While the initial failure of the glucocorticoid receptor antagonist used to IPO went up in flames, I think there are still things to like in this portfolio and again a theme of many of these companies is that at these price ranges, it is mostly upside.

Zentalis Pharmaceuticals ($ZNTL): Zentalis has a WEE1 and a BCL2 inhibitor in early clinical development. The WEE1 story I think is just a type of chemotherapy with very slightly improved therapeutic window. The clinical support for this drug class doesn’t seem outwardly amazing. There’s lots of nausea, vomiting, and fatigue, and the response rate doesn’t seem outwardly impressive. They have tons of cash and are close to zero EV already, but I actually think relative to other names on this list, Zentalis is a bit overvalued.

Revolution Medicines ($RVMD): Revolution is progressing an exciting pipeline of assets centered upon drugging the RAS oncogene. I predict that these will eventually be backbone therapies and widely used across an array of solid tumors.

Black Diamond Therapeutics ($BDTX): Similar to Theseus, Kinnate, and several others, BDTX is using medicinal chemistry to generate more mutation resistant TKIs. EGFR, BRAF, and FGFR.