A Rich Heyman-backed startup focusing on NASH treatments, as well as other liver, GI and metabolic diseases, is set to start trading Wednesday and join the already-loaded class of 2020 biotech IPOs.
Metacrine has raised $85 million for its public offering after priced shares at $13 apiece, the midpoint of its expected range. Selling 6.5 million shares, Metacrine makes good for a market value of roughly $364 million.
Four dozen biotechs had already hit Nasdaq through late August, surpassing the total from all of 2019. Combined, the companies have raised more than $11 billion in a banner year for the industry.
The company currently has two programs in the clinic aiming to treat NASH, an indication that has been tough to crack in recent years. Metacrine’s lead candidates, MET409 and MET642, are once-daily pills that function as farnesoid X receptor agonists.
MET409 completed a 58-patient Phase Ib trial recently examining two different dosage levels, with results posted last month showing improvements in NASH biomarkers after 12 weeks of treatment. Metacrine said that the pill lowered liver fat content, with average relative reductions of 55% in the 80 mg cohort and 38% in the 50 mg cohort, compared with 6% in placebo. The company was also encouraged by numbers indicating MET409 achieved a 30% or greater relative liver fat reduction in 13 of 14 of patients in the 80 mg cohort and 12 of 16 in the 50 mg cohort, compared with just 2 of 18 who took the placebo.
Those results helped earn the program a fast track designation from the FDA last month. Per the S-1, funds from the IPO raise will go toward a Phase IIa trial in NASH in combination with an antidiabetic agent, likely beginning in the first half of next year. MET642 is also expected to begin a Phase IIa monotherapy trial in NASH with the money, and a separate Phase IIa study will also be financed by the raise, evaluating one of the candidates in UC.
Depending on which program shows higher efficacy, the rest of the money will fund a Phase IIb monotherapy trial of either MET409 or MET642 in NASH, as well as preclinical research in other areas.
Heyman, a serial entrepreneur who co-founded Metacrine in 2014, is most prominently known for founding the biotechs Aragon and Seragon. Those companies sold for more than $1 billion apiece in the span of 12 months back in 2013 and 2014. J&J bought Aragon, and while Roche and Genentech purchased Seragon, the duo quietly scrapped that biotech’s lead program from Phase II studies in 2017. Heyman recently joined the board of PMV Pharma after it closed a $70 million Series D raise last month.
NASH has seen little success ever since JP Morgan 2019, when several companies appeared positioned for breakouts in a market ripe for potential blockbusters. Gilead, GenFit and other smaller biotechs have since seen many major trial failures, and Albireo kicked their own NASH program to the curb just last month despite hitting their primary endpoint.