Most biotechs have closed the IPO window this year, but Third Harmonic Bio is pushing it open with a Novartis drug that may work better than the broad selection of inflammation drugs already available to patients. Early clinical data for the biotech show signs of efficacy. Now, the company hopes to use the public market to fund further clinical development of the molecule in a variety of inflammatory diseases.
Cambridge, Massachusetts-based Third Harmonic did not set any financial terms for the stock sale outlined in the preliminary IPO paperwork The application was filed with regulators on Tuesday. However, IPO research firm Renaissance Capital Say The offering could be as high as $150 million. Third Harmonic has applied to list on the Nasdaq under the ticker symbol “THRD”.
Third Harmonic’s research focuses on mast cells, a type of immune cell in the blood whose dysfunction has been implicated in the development of many allergic and inflammatory diseases. These cells are found throughout the body and are prominent in tissues exposed to the external environment, such as the skin, respiratory tract, and gastrointestinal tract.
The lead third-harmonic drug THB001 is a small molecule designed to block KIT, a cell-surface receptor whose role is to regulate mast cells. In its IPO filing, the company noted that KIT inhibition has shown signs of being effective in mast cell-mediated diseases such as asthma. Various therapies are already available to treat asthma and other inflammatory diseases, but Third Harmonic noted in the filing that many of these drugs are insufficient because they target compounds produced by mast cells, such as histamine. For many diseases, multiple compounds are involved.
“We therefore believe that direct targeting of mast cells through highly selective inhibition of KIT is key to achieving the clinical efficacy required for broad relief across a range of allergic and other inflammatory diseases,” Third Harmonic said in the filing.
So far, Third Harmonic has tested its lead drug in a Phase 1a clinical trial. Although the study only recruited healthy volunteers, the drug showed signs of efficacy. The company reported that blood tests showed a dose-dependent decrease in tryptase, an enzyme released when mast cells are activated. Third Harmonic now aims to test whether its drug can treat chronic urticaria, an inflammatory skin condition characterized by hives and rashes. The company said in the filing that it had submitted a clinical trial application in Europe for a dose-escalation Phase 1b study aimed at proof-of-concept in the disease. Data is expected in the second half of next year.
Asthma is the next disease target. Third Harmonic plans to begin a Phase 1b study in the first half of 2023 and report data in the second half of 2024. The biotech is also eyeing the start of a Phase 2 trial in chronic spontaneous urticaria. These studies in the US and Europe are planned for the first half of 2024. Third Harmonic describes its lead asset as a “pipeline in a product.” The company is exploring other diseases where blocking mast cell-driven inflammation might provide relief.
The third harmonic competes in the search for better medicines for hives, and the first-line treatment for hives is antihistamines. Blocking KIT is the target of Celldex Therapeutics’ drug barzolvolimab (formerly CDX-0159). The Hampton, NJ-based biotech has reached early clinical development in hives and other inflammatory diseases. But as an antibody, the drug must be administered as an intravenous infusion. Third Harmonic hopes an oral formulation of its KIT-blocking drug will give it an edge.
Third Harmonic is led by Chief Executive Officer Natalie Holles, who was previously CEO of gene therapy developer Audentes Therapeutics (now part of Astellas Pharma). Venture capital firm Atlas Venture founded Third Harmonic in 2019. That year, it licensed 001 baht from Novartis for $400,000 in cash and took an equity stake in the emerging biotech company. Depending on the progress of the research, more can be paid: $31.7 million for development milestones and up to $200 million for sales and commercialization milestones. Novartis will also receive royalties from the sale of any approved product.
3rd Harmonic raised $155 million to start, most recently $105 million in Series B financing This was announced in February. Atlas is the largest shareholder with a 37.9 percent stake, the filings show. Novartis Biomedical Research Institute owns 9.4% of the company.
Third Harmonic had a cash position of $112.7 million as of June 30, which the company said was sufficient to fund operations for at least 12 months. Third Harmonic plans to use the IPO funds to continue clinical development of TBH100, specifically a Phase 1b study in chronic induced urticaria and a Phase 2 trial in chronic spontaneous urticaria. The cash will support planned asthma Phase 1b testing. The biotech also noted in the filing that the funds may be used to develop or acquire other projects.
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