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Enanta, Tetraphase fare differently in market debuts

by Ben Fidler | Published March 22, 2013 at 3:47 PM

The rising momentum for biotechnology initial public offerings continued this week, particularly in Watertown, Mass., the home of both Enanta Pharmaceuticals Inc. and Tetraphase Pharmaceuticals Inc., which followed one another into the market.

By the time antibiotics maker Tetraphase debuted its shares on the Nasdaq under the symbol TTPH on Thursday, it had already cut the price of its IPO to $7 per share from an earlier plan of between $10 and $12 per share. It increased its offered share count to 10.7 million from 6.82 million, however, still pulling in $75 million in total proceeds.

Tetraphase, which has a market capitalization of about $147 million, traded flat on its initial day on the market, ending the day at $7.05 per share.

Tetraphase's largest stockholders prior to the offering were Mediphase Venture Partners (14.95%), Flagship Ventures (17.11%), CMEA Ventures (17.11%), Skyline Ventures (16.49%), Beacon Bioventures (16.37%) and Excel Venture Management (10.62%).

Tetraphase is a clinical-stage company making antibiotics for serious and life-threatening multidrug-resistant infections. Its lead drug is eravacycline, which it is developing as a broad-spectrum intravenous and oral antibiotic that would be a monotherapy for multidrug-resistant infections.

Tetraphase has already pushed eravacycline through a Phase 2 study, testing the vaccine in patients with complicated intra-abdominal infections, or cIAI. Tetraphase is plotting two separate Phase 3 trials testing the drug in patients with cIAI and complicated urinary tract infections, or cUTI. It hopes to release data from the trials in the first quarter of 2015 and ultimately submit applications to regulators in the U.S. and Europe in late 2015 and early 2016, respectively.

At the same time Tetraphase wrapped up its offering, Enanta, which creates treatments for infectious diseases, strutted its stuff for investors with better initial results. At $14 per share, however, Enanta priced at the low end of its $14 to $16 range before shooting up 22.7% in its first day of trading and closing at $17.18 per share. Enanta offered investors 4 million shares and raised $56 million in total.

Enanta's largest shareholders prior to the IPO were TVM V Life Science Ventures GmbH & Co. KG (18.69%), OBP III - Holding LLC (15.62%), Shionogi & Co. Ltd. (12.46%), AbbVie Inc. (8.35%), Industry Ventures VI LP (7.12%) and HBM Healthcare Investments (Cayman) Ltd. (7.08%), according to regulatory filings.

Enanta was established in 1998 to make therapies for infectious diseases, but has become best known for its hepatitis C, or HCV, programs. The company licensed a polymerase inhibitor for HCV to Novartis AG for up to $440 million in February 2012 and is developing two protease inhibitors jointly with AbbVie. The drug Enanta licensed to Novartis began Phase 1 trials in November. One of the compounds it discovered with AbbVie, ABT-450/r, is being tested in various combinations in both Phase 2 and Phase 3 trials.

Enanta has generated $188.9 million in revenue from its collaborations with Novartis and AbbVie. It could receive an additional $430 million in pre-commercial milestones and $240 million in regulatory milestones from the two drugmakers in the future.

Enanta is also developing an antibiotic for the methicillin-resistant staphylococcus aureus, or MRSA, bacteria strains, that are prevalent in hospitals. Enanta expects to initiate Phase 1 trials for the antibiotic, known as EDP-788, in the first half of 2014.

With both Tetraphase and Enanta now public, six life sciences entities have priced an IPO in 2013. Four companies -- biotechs KaloBios Pharmaceuticals Inc. and Stemline Therapeutics Inc., diagnostics company LipoScience Inc. and Pfizer Inc.'s former animal health division, Zoetis Inc. -- completed IPOs by the end of January. Several other privately held biotechs, among them Sophiris Bio Inc., GW Pharmaceuticals plc, Ambit Biosciences Inc., Omthera Pharmaceuticals Inc., Chimerix Inc. and Aratana Therapeutics Inc., have also filed their Form S-1s. That puts 2013 ahead of last year's pace, when a total of 16 life sciences companies went public.

JPMorgan Securities LLC and Credit Suisse Securities (USA) LLC were joint bookrunning managers for Enanta's IPO. JPMorgan, JMP Securities and Credit Suisse were underwriters along with Leerink Swann LLC.

Barclays plc, BMO Capital Markets Corp., Stifel, Nicolaus & Co., JMP Securities and Needham & Co. LLC were Tetraphase's underwriters.

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Enanta, Tetraphase fare differently in market debuts

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Ben Fidler

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