Tocagen aims for IPO to fund brain cancer trial

Brain cancer specialist Tocagen is to become the latest biotech to test the waters with an IPO this year, after mixed success for recent market launches.

Tocagen has filed with the Securities and Exchange Commission to go public to raise up to $86 million to finance a phase 2/3 trial for its cancer gene therapy combination therapy, which has been designated as a Breakthrough Therapy by the FDA.

The San Diego-based company's therapy uses retroviruses to deliver therapeutic genes into the DNA of cancer cells – an approach designed to encourage the body’s immune defences to attack tumours while leaving healthy tissue intact.

The phase 2 part of the trial of Toca 511 and prodrug Toca FC, in patients with first or second recurrence of glioblastoma or anaplastic astrocytoma, is due to produce data in the first half of next year.

After some positive survival data from a phase 1 trial, Tocagen wants to find out whether the drug will improve overall survival compared with standard of care including Merck’s Temodal and Roche’s Avastin.

The cash from the IPO will last for a further 12 months until the delivery of the phase 2 data and allow it to finish early-stage trials in other indications, and if results are strong they could to a filing with the FDA.

After strong investor interest in biotech IPOs for the last few years, 2017 has had only one big hit – and some notable misses.

Tocagen will be heartened by the launch of Jounce Therapeutics in January– which raised more than $100m with its launch, beating a $75 million target by increasing the size of its offering and upping its share price.

But addiction implant maker Braeburn Pharma pulled its IPO in February because of a lack of interest, and last week cancer biotech BeyondSpring raised just under $3.5 million with its Nasdaq launch – although it did raise another $50 million through a private placement.