Talaris Therapeutics’ IPO raises $150M to transform solid organ transplants

Organ transplants may offer patients a new shot at life, but the procedure is just the beginning of a new set of potential medical problems. Patients require chronic drug therapy to prevent the immune system from rejecting the organ. Those drugs suppress the immune system, which increases the risk of infection or damage to other organs. Talaris Therapeutics is developing a cell therapy that could prevent organ rejection without lifelong use of anti-rejection medicines. It now has $150 million to continue clinical testing of its technology.

Late Thursday, Talaris priced its IPO, offering about 8.8 million shares for $17 apiece. That price was midpoint of its $16 to $18 per share price target. Shares of Talaris began trading Friday on the Nasdaq under the stock symbol “TALS.”

Louisville, Kentucky-based Talaris aims to address the risk of organ rejection by harnessing immune and stem cells from a healthy donor—the patient who donated the organ. According to Talaris’s filing, these cells reprogram the immune system to tolerate the donated organ without the need for chronic immunosuppression. Transplanted into a patient, these allogeneic (from someone else) cells co-exist with a patient’s own immune and stem cells and they learn to recognize each other. The transplant achieves chimerism, in which two sets of DNA coexist in a single body.

“If the donor’s T-cells constitute more than 50% of the detectable T-cells in the recipient’s blood for six months or longer after the transplant, our Phase 2 data have shown that this is highly predictive of the recipient having achieved durable chimerism, and thus durable allogeneic tolerance,” Talaris said in the IPO filing.

Talaris calls its approach facilitated allogeneic hematopoietic stem cell transplantation. The cell therapy candidate, FCR001, is made by a proprietary process that optimizes the numbers of three particular types of cells that the company says are critical for this therapy to work. The therapy is currently in an open-label, Phase 3 study enrolling 120 patients first-time kidney transplant patients receiving their organs from live donors.

The Talaris cell therapy is administered one day after the kidney transplant procedure. The main goal of the study is to assess the therapy’s ability to include durable immune tolerance to the transplanted organ without the need for chronic immunosuppressive drugs. The company expects it will be able to provide an update on the study in the fourth quarter of this year.

Talaris was formed in 2002 under the name Regenerex. From 2013 to 2016, the biotech developed its technology under a partnership with Novartis, which provided funding. That alliance ended when Novartis dissolved its cell and gene therapy group. Regenerex continued its work, raising funding in 2018 and changing its name to Talaris Therapeutics. Through the end of last year, the company had raised $186.2 million, according to the filing. Prior to the IPO, the most recent financing was a $115 million Series B round that was announced last October.

Blackstone is Talaris’s largest shareholder after the IPO, owning just over 20% of the company, according to the prospectus. Longitude Venture Partners owns a 7.4% stake; Qiming owns 7.0%.

Talaris describes FCR001 as providing a “pipeline in a product,” suggesting that this single product could have multiple therapeutic applications. The company said allogeneic tolerance could also apply to treating severe autoimmune disease. Another potential use is treating severe but non-cancerous blood, immune, and metabolic disorders that have been shown the potential to respond to this approach.

Talaris plans to spend about $130 million of the IPO proceeds to continue Phase 3 development of FCR001 in organ transplants. About $40 million is earmarked for two additional clinical tests of FCR001. The first is to assess the cell therapy’s ability to induce durable immune tolerance in patients who have already received a kidney transplant. A Phase 2 study assessing this “delayed tolerance” is slated to begin in the second half of this year. According to the filing, patients in this study will receive the Talaris cell therapy between three months and one year after the initial kidney transplant. If successful, the study could support extending this therapy to more kidney transplant patients. The results could also lay the groundwork for testing this approach in transplants of organs from deceased donors.

“Every year in the United States, there are approximately four times as many deceased donor solid organ transplants as living donor transplants,” the company said in the prospectus. “We are conducting preclinical research to evaluate whether we can procure the same types of stem and immune cells from a recently deceased donor as from a living donor. If our preclinical studies are successful, we intend to assess the ability of FCR001, or a product candidate similar to FCR001 (FCR002), to induce durable allogeneic tolerance in a recipient of an organ from a deceased donor.”

The second Phase 2 study planned is for scleroderma, an autoimmune disease that affects the skin, connective tissue, and internal organs. That clinical trial is expected to start in the second half of this year.

Another $30 million will be spent on the manufacturing operations, readying them for potential commercialization of FCR001. Talaris will also spend about $25 million to continue work on its preclinical programs. Based on these plans, the company calculates that its cash should support operations at least until 2025.

Partnered with Pfizer, Valneva now gets $93.5M for vax pipeline

Valneva, which is already publicly traded in Europe, made its U.S. stock market debut this week. The vaccines developer priced its offering of 2.3 million American depositary shares at $26.41 apiece. Concurrent with that offering, Valneva sold 2.4 million shares in Europe for €11 each. Combined, this global securities offering raised about $93.5 million. The company’s U.S. shares trade on the Nasdaq under the stock symbol “VALN.” On the Euronext in Paris, Valneva trades as “VLA.”

Saint Herblain, France-based Valneva has two commercialized products, both travel vaccines. Ixiaro, which immunizes against Japanese encephalitis, is licensed in the U.S., Canada, and Europe. Dukoral is an oral vaccine for diarrhea prevention. Sales for both in 2020 were less than €66 million, down by nearly half compared to the prior year. In its prospectus, the company attributed the decline to the pandemic and travel restrictions.

Valneva’s most advanced pipeline program, VLA1553, is in Phase 3 testing for the mosquito-borne chikungunya virus. There are no vaccines or treatments available for chikungunya, which has spread to more than 100 countries and has the potential to spread further, the company said in its IPO filing. In Phase 1 testing, the company reported that the vaccine led to the production of antibodies to the virus in all 120 healthy volunteers. Those antibodies were sustained for a year. Based on those results, the vaccine has advanced to Phase 3 testing that has completed enrollment or more than 4,000 adults in the U.S. Preliminary data are expected in the middle of this year.

Another program, VLA15, is currently in mid-stage testing in Lyme disease. The vaccine candidate, which is made from the outer surface protein of Borrelia burgoderfi, the bacterium that causes Lyme, is designed to address the six strains most common in the U.S. and Europe. Last year, Pfizer paid Valneva $130 million up front to begin a development partnership on the Lyme vaccine candidate. Valneva and Pfizer expect to begin the Phase 3 study of VLA1553 in the third quarter of 2022. If all goes according to plan, preliminary data could be available by the end of 2023. Clinical development costs are split, 30% shouldered by Valneva and 70% by Pfizer. If the vaccine is approved, Pfizer will commercialize it and pay Valneva royalties from sales.

Valneva has also turned its attention to the pandemic, advancing Covid-19 vaccine candidate VLA2001 to Phase 3 testing. The vaccine is comprised of whole SARS-CoV-2 virus that has been inactivated. The vaccine includes an adjuvant, an ingredient that boosts the immune response. Regulatory submissions for that vaccine are expected in the fall of this year.

In the IPO filing, Valneva said there is an opportunity to develop a vaccine that is based on an inactivated virus, an approach that has been validated in clinical testing and in the commercial market. Though the Covid vaccine market is crowded, Valneva said its vaccine may have advantages. It causes fewer side effects, and it is easier to manufacture, store, and distribute at standard refrigerator temperatures. These features could make VLA2001 well suited for use in potential booster vaccinations, the company said.

The new capital from the global stock offering will be combined with Valneva’s existing cash holdings to continue development of the pipeline. Valneva plans to spend about $120 million to complete clinical development of its chikungunya vaccine candidate, and then advance it through FDA review. Another $100 million is planned for clinical development of the Lyme vaccine candidate through the completion of Phase 2 testing. The Covid vaccine program will receive about $80 million.

Anebulo Pharma gets $21M to test drug for cannabinoid overdose

Anebulo Pharmaceuticals raised $21 million to continue clinical development of a drug that addresses cannabinoid overdose. The Austin, Texas-based biotech offered 3 million shares at $7 each, which was the midpoint of its targeted price range. Those shares trade on the Nasdaq under the stock symbol “ANEB.”

There is no FDA-approved drug for reversing cannabinoid overdose. Standard care includes benzodiazepines, a class of drugs that offer a calming effect, or waiting for the body to metabolize the active ingredient in the cannabinoid. Anebulo’s lead drug candidate, ANEB-001, is a small molecule designed to bind to and block a cannabinoid receptor, potentially reversing the symptoms of cannabinoid overdose. The drug is currently in Phase 2 testing.

Anebulo was founded in 2020, the same year it licensed its lead compound from Vernalis Limited, a subsidiary of Ligand Pharmaceuticals. In its prospectus, Anebulo said the IPO cash is enough to complete the mid-stage study of ANEB-001 and then proceed to discussions with regulators about Phase 3 clinical trials. But Anebulo added that it expects it will need to raise more capital in about 18 months for those pivotal studies.

A no-go for Gyroscope’s IPO

Clinical-stage gene therapy developer Gyroscope Therapeutics postponed its IPO. In a statement issued early Friday morning, CEO Khurem Farooq cited market conditions as the reason.

“Based on the positive feedback we have received from institutional investors on the strength of our science and investigational gene therapies, we believe it’s in the best interest of our existing shareholders and employees to execute our IPO in more favorable market conditions,” he said. “In the meantime, we are continuing to advance our clinical program for our investigational gene therapy, GT005, as well as our earlier stage pipeline.”

London-based Gyroscope is developing gene therapies for eye diseases that cause vision loss and blindness. The company’s lead candidate, GT005, is currently in Phase 2 testing for the treatment of geographic atrophy that is secondary to age-related macular degeneration.

Photo: HYWARDS, Getty Images 

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