iTeos Therapeutics Begins U.S. IPO Rollout (Pending:ITOS)

Quick Take

iTeos Therapeutics (ITOS) has filed to raise $100 million in an IPO of its common stock, according to an S-1 registration statement.

The company is a clinical stage biopharma firm advancing a pipeline of immuno-oncology drug candidates for treating solid tumors and other cancers.

ITOS has produced promising early stage trial results for its lead candidate and has very large potential markets should it succeed.

I’ll provide an update when we learn more IPO details from management.

Company & Technology

Cambridge, Massachusetts-based iTeos was founded to develop treatments for a wide range of solid tumor, blood and other cancers that enhance the body’s immune system to improve cancer targeting effects.

Management is headed by Chief Executive Officer Mr. Michel Detheux, Ph.D, who has been with the firm since the company’s inception and was previously a director at Ludwig Cancer Research and held several roles at Ogeda.

Below is a brief overview video of iTeos:

Source: PharmaVentures InSights

The firm’s lead candidate, EOS-850, is a small molecule antagonist in Phase 1b/2a trials as a monotherapy for solid tumors.The candidate is also planned for testing in conjunction with other drugs in three trials initiating in Q3 2020.

Below is the current status of the company’s drug development pipeline:

Source: Company S-1 Filing

Investors in the firm have invested at least $181 million and include MPM Capital, RA Capital, Boxer Capital, UBS Oncology Impact Fund, Janus Henderson Investors affiliated funds, and Fund+ NV.

Market & Competition

According to a 2019 market research report by ResearchAndMarkets, the global market for solid tumor treatments was approximately $121 billion in 2018 and is expected to reach $424 billion by 2027.

This represents a forecast CAGR (Compound Annual Growth Rate) of 15.0% from 2019 to 2027.

Key elements driving this expected growth are an increasing incidence of breast cancer as well as growing rates of lung cancer due to a rise of the number of persons smoking and growing air pollution.

Also, the solid tumor area is likely the largest category of cancer treatment by type and the projected growth rate is quite high on such a large base.

Major competitive vendors that provide or are developing treatments include:

Financial Status

iTeos’s recent financial results are typical of a clinical biopharma firm in that they feature minimal revenue and significant R&D and G&A costs associated with advancing its pipeline.

Below are the company’s financial results for the past two and ¼ years (Audited PCAOB for full years):

Source: Company registration statement

As of March 31, 2020, the company had $147.7 million in cash and $14.5 million in total liabilities. (Unaudited, interim)

IPO Details

iTeos intends to raise $100 million in gross proceeds from an IPO of its common stock, although the final amount may be different.

No existing shareholders have indicated an interest to purchase shares at the IPO price, although I expect to see some form of investor ‘support’ in a future filing.

Management says it will use the net proceeds from the IPO as follows:

for the clinical development of EOS-850

for the clinical development of EOS-448

for the development of other product candidates in our pipeline and our drug discovery programs; and

the remainder for general corporate purposes.

Management’s presentation of the company roadshow is not available.

Listed bookrunners of the IPO are J.P. Morgan, SVB Leerink, Piper Sandler and Wedbush PacGrow.

Commentary

iTeos is seeking a typical life science IPO transaction size to advance its pipeline of drug treatment.

The firm’s lead candidate, EOS-850, has produced ‘encouraging preliminary single-agent activity in the dose escalation portion of the [Phase 1/2a] trial.’

Management expects to publish initial topline data from both the monotherapy and combination cohorts in 1H 2021.

The market opportunities for the cancer conditions covered by EOS-850 are extremely large and forecast to grow considerably in the years ahead, although the firm will face significant competition as major pharmas have numerous programs in these areas as well.

Management has disclosed no significant research or commercial collaborations to-date.

iTeos is part of a strong cohort of biopharma firms seeking to go public as the IPO market has reopened.

I’ll provide a final opinion when we learn more details about the IPO from management.

Expected IPO Pricing Date: To be announced.

Gain Insight and actionable information on U.S. IPOs with IPO Edge research.

Members of IPO Edge get the latest IPO research, news, and industry analysis. Get started with a free trial!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.

Be the first to comment

Leave a Reply

Your email address will not be published.


*