BioPharma, Pharma

ArriVent’s Nasdaq Debut Nabs $175M as Signs Indicate an Opening IPO Window

ArriVent BioPharma will apply the IPO cash toward furmonertinib, which the biotech says could offer advantages over Takeda Pharmaceutical and Johnson & Johnson drugs that address the same lung cancer target. It’s the second biotech IPO of this week, following CG Oncology.

Cancer drug developer ArriVent BioPharma has a lead program with the potential to treat lung cancers characterized by certain rare mutations. A pivotal study is underway and the biotech now has $175 million in IPO cash to continue the small molecule’s clinical development.

Late Thursday, ArriVent priced its offering of more than 9.7 million shares at $18 each, which was the midpoint of its targeted price range. Those shares will trade on the Nasdaq under the stock symbol “AVBP.” It’s the second IPO of this week, following the $380 million stock market debut of CG Oncology.

While it’s a stretch to call two IPOs a trend, the growing IPO queue suggests improving conditions for public offerings. In a recent report describing the outlook for venture capital in 2024, PitchBook said positive economic signals of 2023 will spur a comeback in IPOs in the coming year. Those signals include an increase in gross domestic product, no interest rate hikes from the Federal Reserve since last July, and slowing of inflation. The report also notes a downward trend in market volatility.

“Assuming volatility remains tempered in 2024, this could act as a catalyst for new IPO filings,” PitchBook said. “Reduced volatility tends to foster a more stable and favorable market environment, which is attractive to both issuers and investors.”

Unlike the go-go days of 2021 and 2022 IPOs, more recent biotech IPOs have been from companies with at least some clinical data to reduce investor risk. That trend became apparent in the few biotech IPOs of last year. ArriVent can point to clinical data that reduce the risk for its lead drug candidate furmonertinib, which belongs to the class of cancer drugs called tyrosine kinase inhibitors.

Furmonertinib was designed to treat non-small cell cancer (NSCLC) with EGFR mutations. Newtown Square, Pennsylvania-based ArriVent is developing its drug specifically for rarer EGFR exon 20 insertion mutations, which the company says are underserved by currently available therapies. In the IPO filing, the company said it believes its drug has the potential to retain many of the advantages of third-generation EGFR tyrosine kinase inhibitors, including the potential to overcome certain mutations that confer drug resistance, while also targeting a broader set of EGFR mutations.

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ArriVent is not the only company that has pursued EGFR exon 20 insertion mutations. Takeda Pharmaceutical steered the pill Exkivity to a 2021 accelerated approval. However, the drug failed its confirmatory study last year, and the Japanese drugmaker agreed to voluntarily withdraw the product from the market. Johnson & Johnson’s Rybrevant won its accelerated approval in 2021. Intravenously infused Rybrevant succeeded in its confirmatory study and J&J is now seeking to convert the drug’s status to full FDA approval.

ArriVent contends there’s room for improvement on the Takeda and J&J products. In the filing, the company said those drugs don’t sufficiently penetrate the brain, which is a necessary capability for treating cancer that has metastasized to the brain. ArriVent also aims to offer better safety and tolerability, adding that furmonertinib, formulated as a once-daily pill, would be less burdensome to patients compared with the IV-infused Rybrevant.

ArriVent is testing furmonertinib in a global Phase 3 clinical trial evaluating the drug as a first-line treatment for non-squamous locally advanced or metastatic NSCLC with exon 20 insertion mutations. The drug will be compared to pemetrexed, the chemotherapy that is currently the standard first-line treatment for these cancers. The main goal is to measure progression-free survival; preliminary data are expected in 2025. A Phase 1 test is also underway testing furmonertinib in patients with P-loop and-alpha-c-helix compressing (PACC) mutations, another uncommon mutation.

ArriVent formed in 2021, backed by $90 million in financing to support a business model of securing rights to drug candidates from emerging markets that could be developed and commercialized in Western markets. Cancer is its initial focus. Furmonertinib, which is already approved in China, was licensed from Shanghai-based Allist Pharma. ArriVent holds rights to the molecule outside of China.

ArriVent reported a $166.3 million cash position as of the end of the third quarter of 2023. The company plans to apply most of the IPO cash toward furmonertinib. It has budgeted between $50 million and $60 million to support development of the lead drug candidate for NSCLC with EGFR mutations, according to the filing. Another $30 million to $40 million is planned for development of the drug in NSCLC characterized by PACC mutations.

The ArriVent pipeline also includes a preclinical antibody drug conjugate. In the filing, the company said it expects to select a lead candidate for this program in late 2024 or early 2025.

Meanwhile, the IPO queue continues to grow. Other companies that have filed IPO paperwork this month include Alto Neuroscience, Metagenomi Technologies, and Kyverna Therapeutics.

Photo: Stephanie Keith/Bloomberg, via Getty Images