Today, when a life sciences company enters the public market with a deep 9-figure offering, it is certain that the capital will be used in manufacturing. Evotec is a biotech industry player with decades of history and has recently added new manufacturing capabilities. The company aims to expand its biologics production bases in the United States and Europe, and its Nasdaq debut has raised $435 million to support these programs.
Evotec may be a newbie to many American investors, but it is not a newbie to the open market. The Hamburg-based company has been trading on the Frankfurt Stock Exchange since 1999 under the ticker symbol “EVT”. The company’s stock began trading on the Nasdaq on Thursday under the ticker symbol “EVO”. Evotec supply 20 million American Depositary Shares, US$21.75 per share. This is 2 million shares less than the stock it plans to issue at a price of $26.16 per share. Evotec’s closing price on Friday was $22.55.
In its Prospectus, Evotec said, increasing understanding of the molecular and genetic basis of diseases is driving the need for advanced technologies that can interpret and translate the large amounts of data generated. The company has developed such technologies, including computational software that recognizes biomarkers and analyzes how drugs work. Evotec’s artificial intelligence and machine learning capabilities generate and analyze data to provide insights and predictions about the efficacy of drug candidates. The company’s business has been providing these technologies to biopharmaceutical companies that discover and develop drugs. In this regard, Evotec is a service provider, but its relationship with the company is not always strictly as a supplier.
Evotec generates revenue in many ways. The company can provide products under a fee-for-service model, similar to the relationship between many contract research organizations and pharmaceutical companies. In these cases, the biopharmaceutical company owns all rights to one or more of its drugs. However, in other cases, Evotec has also established partnerships that share the risks of drug development. Evotec provides its technology and services in exchange for milestone payments as the project progresses and potential royalties for commercialized product sales.
According to the document, Evotec has participated in 11 public clinical testing pipeline projects and more than 100 discovery or preclinical development projects. Evotec also invests in products or companies that may generate returns when these companies are listed or acquired in the future. The document stated that as of June 30, the company’s equity investment covered 90 active projects.
Although Evotec has been in business since 1993, it has achieved significant growth in recent years. Revenue in 2020 was 500.9 million euros, an increase of 12.2% over the previous year. In the first half of this year, Evotec reported revenue of 271.3 million euros, an increase of 17.5% year-on-year. This growth has grown with the increase of customers. Evotec stated that its number of customers in 2020 was 829, compared with 769 in 2019. According to documents, the three largest customers-Bristol-Myers Squibb, Merck and Sanofi-together account for 24% of Evotec’s 2020 revenue. This is a decrease from 30% in 2019, but the company attributes this decline to revenue growth from other customers. It is expected that manufacturing services will bring more revenue growth, which is one of the driving factors for the US stock issuance this week.
In 2019, Evotec acquired Just Biotherapeutics, a Seattle company that applies artificial intelligence and machine learning capabilities to the discovery and development of biological drug candidates. Just Bio has a manufacturing facility in Redmond, Washington, which opened in August. The website is called J.POD, and it has signed a manufacturing agreement with the US Department of Defense involving the production of monoclonal antibodies for Covid-19. The Redmond plant also counts Merck as one of its partners in the pharmaceutical industry. Another production site in Toulouse, France, was acquired from Sanofi last year. There, Evotec plans to build a second J.POD facility on the acquired land.
Evotec stated in the prospectus that approximately $100 million in stock sales proceeds will be used to expand the Redmond plant. Another $175 million is used to build additional biologics production capacity in Toulouse. Evotec also plans to invest in its technology. Approximately $35 million is dedicated to the company’s precision medicine platform, including expanding its induced pluripotent stem cell technology platform, expanding access to patient-sourced samples and disease-related data, and expanding the ability to analyze these data.
Although Evotec has always been a partner of the pharmaceutical company, the company does have its own uncooperative drug pipeline. Evotec plans to spend US$115 million to accelerate the development of these drugs and add more drugs. The company said these drugs may fall into the hands of partners in the pharmaceutical industry.
Evotec’s business model is profitable. The company expects net income for the nine months ending September 30 to be between 245 million and 249 million euros, compared with 5.8 million euros in the same period last year.The company attributes most of its growth to its investment income Exscientia, an artificial intelligence biotechnology company, is a partner of Evotec and completed its IPO last month.
IO Biotech’s IPO raised $100 million for a new twist in cancer immunotherapy
IO Biotech is a clinical-stage company that develops peptide drugs to address cancer targets and raised $100 million when it debuted.Company headquartered in Copenhagen, Denmark Pricing It issued 7.15 million shares at a price of $14 per share, which is the low end of its estimated price range. The company previously set a goal of selling 6.5 million shares at a price of US$14 to US$17 per share. IO’s stock began trading on the Nasdaq on Friday under the ticker symbol “IOBT”.
IO was established in 2014 and spun off from the National Cancer Immunotherapy Center at Herlev University Hospital in Denmark. The company calls its technology platform “T-win”. IO’s drugs are designed to activate naturally occurring T cells to target mechanisms that suppress the immune response. The company stated in its IPO document that T-win drugs provide a dual approach. First, they kill tumor cells and cells expressing immunosuppressive proteins in the tumor microenvironment. The second mechanism is the ability to regulate the tumor microenvironment, making it a more pro-inflammatory and anti-tumor place.
“Our T-win technology is based on our team’s [tumor microenvironment] And the tumor’s ability to evade surveillance and destruction by the immune system,” IO said in Listing application“Our method is in contrast to previous attempts to block a single immunosuppressive pathway or direct the immune system to fight against specific recognition antigens expressed by tumor cells.”
IO’s main drug candidates, IO102-IO103, are designed to target the immunosuppressive mechanism of two proteins, IDO and PD-L1. IO said that in a phase 1/2 trial in patients with advanced melanoma, the results showed “significant” tumor regression and a durable anti-tumor response. In a study of 30 patients, the tolerability of the therapy was also controllable. The overall response rate was 73%; the complete response rate was 47%. The company now plans to advance IO102-IO103 to a key phase 3 clinical trial, which will evaluate the combination of the therapy and Merck’s anticancer drug pembrolizumab (Keytruda). The document shows that the trial aims to recruit 300 patients and is expected to begin by the end of this year.
IO is preparing to evaluate its lead drug as a first-line treatment for other solid tumor types. These tests will be conducted as basket tests, in which the research drug is tested against several different cancers, all of which have the same biological or genetic characteristics. The planned basket study will cover cancers including non-small cell lung cancer, head and neck squamous cell carcinoma, and bladder urothelial carcinoma. In addition to evaluating the therapy as a first-line treatment, the company also plans to test it before surgery as a neoadjuvant treatment, which is the first step in trying to shrink the tumor before surgery. IO also plans to test it as an adjuvant treatment, which is a post-surgery treatment to reduce the chance of cancer recurrence.
The documents show that the largest shareholder of IO is Lundbeckfond Invest, which owns 14.2% of the shares after the IPO. After the initial public offering, Novo Holdings owns 10.8% of the company’s shares. As of September 30, IO reported that it had $45.4 million in cash. According to an investment agreement signed by the company earlier this year, another $84.1 million was issued to the company last month. In the prospectus, IO stated that it plans to invest approximately US$50 million in the third phase of testing of its main therapeutic drug candidates. Another $20 million will be used to develop the therapy in the planned second phase of the basket trial. Another project, IO112, will receive US$10 million for Phase 1/2 trials in a planned combination with IO102 and IO103.
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