They’re going for it: David Liu’s preclinical biotech shoots for a (maybe $200M) IPO
26 Sep 2022
IPO
Can a preclinical biotech with grand ambitions, a star scientific founder and enthusiastic backers with deep pockets fly a big IPO against the gale force headwinds we’ve seen this year?
In this economy?
The people at Prime Medicine, which bills itself as a CRISPR 3.0 play, aim to find out if they can buck the trend — which has relented enough to allow for one upsized biotech IPO to get through — and possibly help pry open a window that was slammed shut at the beginning of the year.
Renaissance Capital analysts say the $100 million placeholder for Prime is likely a standard stand-in for what will likely be a $200 million push.
Prime isn’t downplaying their people or potential in the S-1. They herald their scientific founder David Liu out of the Broad as a “world-renowned leader in the field of gene editing.” And they say they landed a crucial patent just days ago, covering their prime editing approach.
David Liu takes the wraps off $315M launch round for Prime Medicine and new CRISPR tech that gave Bob Nelsen a 'holy crap' moment
Liu is credited with a CRISPR 2.0 base editing tech that’s now in use by Verve and Beam, expanding on the next-gen approach that’s considered significantly more versatile than the earliest CRISPR tech. Prime’s claim to fame is that they can move beyond most of the barriers of the early generations and address hundreds of diseases still out of reach of the gene editing pioneers.
In describing their technology in the S-1, the company lays out how they believe they’ve found a better, safer technology to accomplish gene editing, which could lead to cures for a host of diseases like sickle cell disease, where they completed their preclinical proof of concept work.
And along the way they say they have “incorporated dual-flap Prime Editing technology enabling us to establish Prime Editors with greater than 75 percent precise removal of pathological expansion repeats in five different repeat expansion diseases.”
From the S-1.
Our novel Prime Editors have two main components that act together to edit DNA: (i) a Prime Editor protein, comprising a fusion between a Cas protein and a reverse transcriptase enzyme, and (ii) a pegRNA, that targets the Prime Editor to a specific genomic location and provides a template for making the desired edit to the target DNA sequence. Prime Editing leverages the established DNA-targeting capabilities of CRISPR-Cas proteins modified to nick, but not cause double-stranded DNA breaks, and combines these with the DNA synthesis capabilities of reverse transcriptase enzymes, which have been engineered to efficiently and precisely copy a pegRNA-encoded edited sequence into target DNA. This proprietary combination enables the precise and targeted editing of any single base pair of DNA to any other desired base pair, the precise insertion or deletion of DNA, and combinations of these edits, which has not been previously possible.
“I actually said ‘holy crap, holy shit,’” ARCH investor Bob Nelsen told Endpoints News at its public debut. ARCH currently controls about 14% of the stock, with GV in for 14.6%. Liu himself retained a 25% chunk of equity that puts him as the single biggest winner — if they can pull this off as planned.
That kind of talk would easily have scored a big raise during the pandemic, when investors embraced all things biotech. But the IPO window was largely slammed shut in Q1 as investors fled risk and biotech — especially as the grim reality of biotech success rates became obvious to first timers. Recently, though, we saw Third Harmonic Bio price an upsized $185 million IPO, signaling a thaw in Nasdaq’s icy waters.
First of more? Third Harmonic prices upsized IPO to raise $185M
If Prime makes the leap, look for others to follow.
I talked with Prime CEO Keith Gottesdiener about the company for the Endpoints 11 last year. He told me:
We do have to get this into humans and show that it works in humans. For the life of us, we can’t see any reason conceptually why that wouldn’t be true. Prime editing has already been done incredibly widely. It’s been used in plants, drosophila, I think zebra fish, all sorts of mammals, last week someone prime edited a rabbit. I joke, I’m not quite sure why the rabbit was the target organism to do that, but it’s been used incredibly widely — just about every cell that we’ve looked at. And I just say just about, because the number of types of cells in organs we’ve looked at still is limited, it’s in the dozens, not the hundreds. Prime editing seems to work quite widely. And my own personal view is because we bring a lot of machinery in with us when we go in. And so there isn’t much for the cell to do except be edited. And if that’s true, we think we can work in lots of places where we go forward. And I think that’s going to be one of the things that really makes this special in some ways….
It is our baby, and we’re learning that doing prime editing well requires a tremendous amount of know-how. There are a lot of choices to make, and we’ve spent the last year really trying to understand how to do this extremely well and to hit high efficiencies with low off-target activity. And it’s not trivial to do that. And that may turn out to be as important, if not more so than the robust IP portfolio that we have as well. Okay. So those all point to the fact that maybe we don’t want to throw it over the wall to a lot of people at this point, because frankly people could screw it up unintentionally or for other reasons….
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