Pandion Therapeutics Begins U.S. IPO Plan (Pending:PAND)

Quick Take

Pandion Therapeutics (PAND) has filed to raise $75 million in an IPO of its common stock, according to an S-1 registration statement.

The company is developing drugs to treat various autoimmune diseases.

PAND has shown promising in vitro results for its lead program.

When we learn more IPO details, I’ll provide an update.

Company and Technology

Watertown, Massachusetts,-based Pandion was founded to advance a pipeline of treatments for ulcerative colitis and various gastrointestinal and liver immune diseases.

Management is headed by Mr. Rahul Kakkar, M.D., who has been with the firm since August 2019 and was previously founder and Chief Medical Officer at Corvidia Therapeutics, a privately-held biopharma firm.

Below is a brief overview video of ulcerative colitis:

Source: Animated IBD Patient

The firm’s lead candidate, PT101, is in Phase 1 trials for the treatment of ulcerative colitis. In in-vitro studies, the compound activated Treg cells without activating proinflammatory cells, holding the possibility that it will act to “rebalance a dysregulated immune network in the context of autoimmune disease.”

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 $108 million and include Versant Venture Capital, Polaris Partners, Roche (OTCQX:RHHBY), S.R. One, AI Pan and Boxer Capital.

Market and Competition

According to a 2020 market research report, the global market for ulcerative colitis treatments was valued at $6.8 billion in 2018 and is expected to reach $10.25 billion by 2027.

This represents a forecast CAGR (Compound Annual Growth Rate) of 4.6% from 2019 to 2027.

Key elements driving this expected growth are increasing treatment options due to continued medical research to reduce or eliminate symptoms and improve colon healing.

Also, the Asia Pacific region is expected to produce the fastest growth rate by region, growing at a CAGR of 5.1% during the period and accounting for 8% of the global market by 2027.

Major competitive vendors that provide or are developing treatments include:

Financial Status

Pandion’s recent financial results are typical in that the firm has received very little revenue and has significant R&D and G&A expenses associated with advancing its pipeline through the development process.

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 $67.7 million in cash and $15.2 million in total liabilities (Unaudited, interim).

IPO Details

Pandion intends to raise $75 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. It is common to see some form of existing investor “support” for life science IPOs.

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

To advance the development of PT101, including our Phase 1a clinical trial in healthy volunteers and our planned Phase 1b/2a clinical trial for the treatment of patients with moderate-to-severe ulcerative colitis;

To continue research and development of PT627 and PT001, including preclinical research, IND-enabling studies and a Phase 1a clinical trial for each of PT627 and PT001;

To continue research and development of PT002 and our TALON discovery programs; and

The remainder for working capital and other general corporate purposes.

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

Listed bookrunners of the IPO are Goldman Sachs, Morgan Stanley, SVB Leerink and BMO Capital Markets.


Pandion is seeking a typical IPO transaction size for a clinical stage life science company.

The firm’s lead candidate is in Phase 1 safety trials with health volunteers in Canada and management expects to report the results of the trial in the first half of 2021.

If the Phase 1 trial is successful, the firm will likely begin a Phase 1a/2b trial in patients with ulcerative colitis in the latter half of 2021.

The market opportunity for ulcerative colitis treatments is fairly large and expected to exceed $10 billion by 2027, representing a moderate growth trajectory.

In late 2019, Pandion signed a collaboration deal with Astellas Pharma to develop its Pancreas Tethers technology to treat autoimmune diseases of the pancreas.

The firm received an up-front payment of $10.0 million, of which some has been recognized as revenue to-date.

If the drug ultimately proves successful, PAND will be entitled to receive tiered royalties on worldwide net sales in the future.

Goldman Sachs is the lead left underwriter and IPOs led by the firm over the last 12-month period have generated an average return of 86.3% since their IPO. This is a top-tier performance for all major underwriters during the period.

Pandion has shown promising in-vitro results for its lead candidate program, so I look forward to learning the IPO’s pricing and valuation assumptions.

Expected IPO Pricing Date: To be announced.

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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.

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