Checkmate Pharmaceuticals (CMPI), a clinical-stage immune-oncology biotech developing therapies for solid tumors, announced terms for its IPO on August 3, 2020.
The Cambridge, Massachusetts-based firm plans to raise $75 million by offering 5 million shares at a midpoint price of $15 per share, excluding the selling of standard underwriter options. The company would command a fully diluted enterprise value of $424.6 million at the midpoint of the proposed range.
According to an amended registration statement, CMPI is collaborating with Merck and Pfizer to advance its CMP-001, a biologic particle treatment for melanomas and head & neck squamous cell carcinoma. The treatment is a differentiated Toll-like receptor nine agonists delivered as a biologic virus-like particle that uses a CpG-A oligonucleotide as a significant component. It is designed to trigger the body's innate immune system by directing activated anti-tumor T cells to attack both the injected tumor and also tumors present in the body.
So far, CMP-001 has shown promising initial stage trial results in combination with other melanoma drugs at various treatment levels and has been studied in over 200 melanoma patients. In its Phase 1b trial for advanced anti-PD-1 refractory melanoma, as a monotherapy and in combination with pembrolizumab, CMPI has observed a record objective response rate of 28%.
The company was founded in 2016 and has received over $191 million funding from a number of investors, including Sofinnova Ventures, Novo Holdings, F-Prime Capital, venBio, Longitude Capital Partners, Decheng Capital, Omega Fund and Medicxi.
Regarding the valuation, the CMPI management targets a suggested valuation within a standard range at IPO for the firm, so the IPO seems reasonably priced. This is further helped by a 2018 market research report by Research and Markets, which project the global demand for melanoma treatments to reach $5.9 billion by 2023. This represents a CAGR (Compound Annual Growth Rate) of 12.62% from 2018 to 2023. The anticipated surge is expected to be driven by continued reduction in immune system functioning occasioned by an aging population and increased exposure to ultraviolet light.
The HNSCC (Head and Neck Squamous Cell Carcinoma) market is also expected to reach $4.5 billion by 2027, surging at an estimated 17.3 percent from 2020 to 2027.
According to the company, it plans to use the net proceeds from the IPO to fund
· Completion of a Phase 2 PD-1 refractory melanoma study with CMP-001
· development of CMP-001 in PD-1 naïve front-line melanoma
· Completion of a Phase 2 proof of concept study with CMP-001 in head and neck squamous cell carcinoma.
· Research and development programs to support clinical trials and future commercial growth.
The IPO Pricing date is slated for August 6, 2020.