BioPharma, Pharma

Lyell, Verve IPOs raise a combined $692M as both biotechs steer toward clinical trials

Lyell Immunopharma and Verve Therapeutics are still preclinical, but they’re bringing novel genetic approaches to the treatment of cancer and cardiovascular disease. Now the two companies can claim two of the biggest biotech IPOs of 2021 so far.


At one time, preclinical biotechs had a hard time pulling off IPOs. Investors wanted to see early data from tests in humans to reduce their financial risk. But Lyell Immunopharma and Verve Therapeutics aren’t the typical preclinical biotech companies. Each led by a prominent physician, they’re developing novel genetic approaches to treat cancer and cardiovascular disease. Now as they approach the clinic, the companies can claim two of the biggest biotech IPOs of 2021 so far.

Lyell raised $425 million for its work on new cell therapies for cancer. The South San Francisco-based company offered 25 million shares priced at $17 apiece, which was the midpoint of the price range that the company planned. Those shares now trade on the Nasdaq under the stock symbol “LYEL.”

Cell therapy has ushered in new treatment options for some of the most advanced and difficult to treat cancers, but as this emerging area of medicine grows it has also exposed some of the limitations of using cells as living drugs. Once robust immune cells can lose their effectiveness, developing what’s called T cell “exhaustion,” the company said in its IPO filing. Another problem is what Lyell calls “durable stemness,” the ability of T cells to self-renew, expand, and persist in their anti-tumor response. Lyell aims to improve cell therapies on both fronts by making genetic tweaks that reprogram these cells to improve their “fitness.”

Lyell has two proprietary technologies, both of which do their work outside of the patient. Gen-R is the genetic reprogramming platform designed to overcome T cell exhaustion. Epi-R is the epigenetic reprogramming platform designed to create T cells with durable stemness. The company believes that both technologies will help bring T cell therapies to solid tumors. As of now, the FDA-approved CAR T cell therapies address only blood cancers. In the filing, Lyell said it believes its T cell reprogramming platforms can be directed at any type of cancer.

The lead Lyell program, LYL797, is a CAR T therapy being developed to target ROR1, a protein that is overexpressed in some cancers. The company is developing this therapy as a treatment for non-small cell lung cancer and triple negative breast cancer. Lyell expects to file an investigational new drug (IND) application for that program in the first quarter of 2022.

The next program, LYL 845, is a type of cancer immunotherapy called a tumor-infiltrating lymphocyte. Lyell is developing this cell therapy for multiple types of solid tumors. LYL845 incorporates the company’s Epi-R technology to improve the durable stemness of the cells that comprise the therapy. Lyell expects to submit an IND filing in multiple tumor indications in the second half of next year.

Lyell is also in the second year of a five-year partnership with GlaxoSmithKline that’s applying the biotech’s technologies to the pharma giant’s experimental cancer cell therapies. The lead program in that partnership is a T cell receptor therapy from GSK that targets a cancer antigen called NY-ESO-1. Under the agreement, Lyell is responsible for preclinical development while GSK will handle clinical testing. An IND filing is expected in the first half of 2022, according to the IPO documents. Lyell said that clinical tests could done be in synovial sarcoma, among other solid tumors.

Lyell was founded in 2018 by Richard Klausner, former director of the National Cancer Institute and a co-founder of cell therapy company Juno Therapeutics and diagnostics firm Grail. Prior to its IPO, Lyell had raised more than $1.3 billion in total financing, according to the filing. The most recent fund raise was in March 2020, when it closed a $493 million Series C round. ARCH Venture Partners is Lyell’s largest shareholder, owning 15% of the company after the IPO, the filing shows.

GSK is the second largest shareholder with a 12.5% post-IPO stake. When the pharma giant struck up its alliance with Lyell, it made a $103.6 million upfront payment to its partner, which breaks down to $45 million cash and a $58.6 million equity investment, according to the IPO filing.

With the IPO proceeds and existing cash holdings, Lyell plans to spend about $130 million to finance Phase 1 tests of LYL797 through completion. The same amount is budgeted for LYL845 through the completion of Phase 1. Another $100 million is planned for advancing the Gen-R, Epi-R, and cell rejuvenation technology platforms. And yet another $100 million is set aside to expand the company’s manufacturing capability. Lyell plans to do some of its manufacturing in house at a facility the company built in Bothell, Washington.

Verve upsizes IPO to back its genetic meds for cardio disease

Verve Therapeutics is still in preclinical development, but the biotech found a particularly welcoming reception from investors who warmed to the company’s genetic medicines approach to cardiovascular disease. Cambridge, Massachusetts-based Verve had planned to offer 11.8 million shares in the range of $16 and $18 apiece. It ended up boosting the deal’s size and offered more than 14 million shares for $19 each, raising $266.7 million. Verve shares are trading on the Nasdaq under the stock symbol “VERV.”

Cholesterol is the bogeyman in cardiovascular disease, driving the development of the plaque that builds up in hardening arteries. The standard of care is cholesterol-lowering drugs that must be taken chronically. Verve is developing a gene-editing medicine that’s a potential one-time treatment.

Verve’s drugs target genes in the liver to disrupt the production of proteins that cause cardiovascular disease, according to the IPO filing. Those drugs use a gene- editing technology called base editing, which enables for more precise edits than CRISPR. The Verve therapies are comprised of messenger RNA that encodes for a gene or a base editor, as well as a guide RNA that targets the therapy to a gene of interest in the liver.

This therapy is carried to the liver encapsulated by a lipid nanoparticle, which has affinity for the organ. The use of a lipid nanoparticle avoids the viral delivery approaches of some genetic medicines. Viral vectors have been associated some health risks, such as an immune response to the virus.

For its first drug, VERVE-101, the company aims to treat a rare, inherited form of high cholesterol known as familial hypercholesterolemia (FH). The disease is caused by a genetic mutation that makes it difficult for the body to clear cholesterol. People who inherit FH have life-long, severely high cholesterol levels that leads to an early onset of atherosclerotic cardiovascular disease (ASCVD). Verve aims to treat the high cholesterol levels by turning off PCSK9, one of the genes that contributes to FH. Verve plans to evaluate the safety and efficacy of its lead program in FH patients. If the results are successful, the company plans to expand tests of its drug to include patients whose ASCVD is not driven by FH.

In preclinical research, Verve has demonstrated its base-editing therapy can turn off PCSK9. Furthermore, turning that gene off led to a durable reduction in both the PCSK9 protein as well as cholesterol levels. Results of those tests in monkeys were published last month in the journal Nature. Verve isn’t the only company that’s testing a way to turn off PCSK9. Durham, North Carolina-based Precision Biosciences is in preclinical development of a potential gene-editing therapy that targets the gene.

The second program in Verve’s pipeline is designed to permanently turn off a gene in the liver called ANGPTL3. This gene is a key regulator of cholesterol and triglyceride metabolism. Turning the gene off is hoped to lead to lower cholesterol and triglyceride levels in a way that is different than targeting PCSK9. As with VERVE-101, the preclinical ANGPTL3 program will initially be evaluated in FH patients. If successful there, Verve could further develop the drug as a preventative measure for cardiovascular disease in the general population.

Verve was founded in 2018 by Sekar Kathiresan, whose experience includes serving as a cardiologist at Massachusetts General Hospital for more than two decades. For three of those years, he was director of the hospital’s Center for Genomic Medicine. Since its founding, Verve has raised $216.5 million, according to the filing. The company’s largest shareholder is GV, with a 24.6% post-IPO stake, followed by Biomatics Capital Partners’ 5.9% stake, according to the filing.

Verve will combine the IPO proceeds with its existing cash holdings to continue the development of its pipeline programs. About $84 million is planned for advancing VERVE-101 through the start of human testing. Verve said in the IPO filing that it plans to submit an investigational new drug application for VERVE-101 to the FDA and other regulatory agencies in 2022. Another $111 million is earmarked for the ANGPTL3 program, supporting it through the start of a clinical trial. Verve plans to spend $65 million on additional R&D.

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