Acelyrin files IPO – is a biotech comeback on the way?

Acelyrin's Shao-Lee Lin

Acelyrin founder and chief executive Shao-Lee Lin

Initial public offerings in the biotech sector nosedived last year after a lot of activity in 2021, but have remained few and far between this year amid tough economic conditions. Now, California Acelyrin has broken ranks and filed to list on the Nasdaq under the SLRN ticker.

There’s no indication yet on how much it is looking to raise with the IPO – its filing suggests $100 million, although that may simply be for administrative fee purposes – but Acelyrin says it will use the proceeds to fund further clinical development of lead drug izokibep and other pipeline candidates.

Izokibep is an IL-17A inhibitor in phase 2b/3 trials for hidradenitis suppurativa (HS), psoriatic arthritis (PsA) and uveitis, with a study in axial spondyloarthritis (AxSpA) also planned.

The drug molecule is much smaller than other biologics in the IL-17 class, which includes blockbusters like Novartis’ Cosentyx (secukinumab), and Acelyrin reckons this will allow it to penetrate more deeply into tissues, improving its efficacy.

The Los Angeles company – headed by former Horizon Therapeutics chief scientific officer, Shao-Lee Lin – recently reported clinical results in HS and PsA, which back up that hypothesis.

Lead indication HS is a serious, chronic inflammatory skin disease with limited treatment options that leads to skin abscesses, pain, scarring, malodour, and has a devastating impact on patients’ quality of life.

A second candidate, anti-IGF-1R antibody lonigutamab, was brought into the fold through Acelyrin’s acquisition of ValenzaBio in January and is in early clinical testing for thyroid eye disease, while the biotech also has a c-KIT inhibitor called SLRN-517 in preclinical development, which it says has potential to treat chronic urticaria.

Acelyrin has already secured more than $550 million in committed capital, $400 million of which has already been received, with the remainder due on 30th June if the IPO isn’t completed by that date. It made a $65 million loss last year, according to the IPO registration filing with the Securities & Exchange Commission (SEC).

Only a handful of biotechs have completed IPOs this year, headed by Mineralys’ $192 million raise and Structure Therapeutics’ $161 million listing in February, with Genelux and Cadrenal Therapeutics raising $15 million and $7 million, respectively, in January.

A recent Reuters report suggests there may be a pick-up in pace later in 2023, thanks to a slowdown in the pace of interest rate rises, which make it harder to access cheap borrowing - although, it says investors will be more inclined to back companies with drug candidates already in clinical trials.