CG Oncology lines up $180m IPO and a $1bn valuation

CG Oncology is the latest biotech to take a look at a share listing in the US, aiming to raise around $180 million in the process, in another sign of a possible recovery in biotech initial public offerings (IPOs).

The biotech is pitching at around $17 per share with the offer, with the total raised potentially reaching $209 million if the underwriters of the listing take up an over-allotment option, and if successful will value it at almost $1 billion. It plans to list on the Nasdaq under the CGON ticker.

Most of the proceeds ($155 million) are earmarked for continued development of the Irvine, California-based biotech’s lead drug candidate cretostimogene grenadenorepvec for high-risk BCG-unresponsive non-muscle invasive bladder cancer (NMIBC), which picked up a breakthrough designation from the FDA last year.

The oncolytic virus is being tested as a monotherapy in the phase 3 BOND-3 trial, as well as the phase 2 CORE-001 in the same patient population as a combination therapy with MSD’s PD-1 inhibitor cancer immunotherapy Keytruda (pembrolizumab).

There is a significant unmet need for treatments of NMIBC, given limited approved therapies, as well as patient reluctance to undergo surgery to completely remove the bladder, although, latterly there has been some progress to report.

In late 2022, Ferring Pharmaceuticals’ Adstiladrin (nadofaragene firedenovec) gene therapy for BCG-unresponsive NMIBC was cleared in the US, providing a new option for patients, although the FDA turned down another candidate – ImmunityBio’s IL-15 agonist Anktiva (N-803) – as a combination with BCG therapy last year. Anktiva was, however, refiled for approval last October, with a new decision due later this year.

Other types of bladder cancer are being evaluated as potential candidates for cretostimogene grenadenorepvec therapy in combination with Bristol-Myers Squibb’s PD-1 inhibitor Opdivo (nivolumab).

Along with the investment in cretostimogene grenadenorepvec, which is CG Oncology’s sole asset, the biotech said it may also use some of the proceeds of the IPO to add others to its pipeline. If it goes through, it will have around $369 million in cash and liquid reserves, having completed a $105 million crossover financing round last summer.

After a lacklustre period for biotech IPOs in 2023, there are signs that the market is picking up, with a handful of announcements since the start of the year from Alto Neuroscience, ArriVent Biopharma, Kyverna Therapeutics, and Metagenomi. None have yet come to fruition.