Albireo finds a way to go public

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When the stock markets turn sour it can be difficult for a private company to graduate to a stock market listing, necessitating a plan B. One strategy is to seek out a listed shell to reverse into, and a case in point is Albireo, which yesterday found just such a home in the failed fast-acting insulin business Biodel.

Albireo will be hoping to tap into continued interest in orphan conditions and liver diseases, and will no doubt seek to capitalise on positive data to raise cash. Curiously, its move is the second private takeout of a public business in the space of two days.

However, the earlier transaction, Arbor’s takeover of Xenoport, was clearly aimed at the target company’s assets, and in fact the acquirer’s plan seems to be to cancel Xenoport’s public listing (Xenoport goes out with a whimper, May 24, 2016).

A new Albireo

Not so in the case of Albireo, which will be the only significant remaining operation of the combined entity. In any case, Biodel had few assets to speak of, and after failing to bring the ultra-fast acting insulin Linjeta to market it moved last December to restructure, cut spending and seek “strategic alternatives”.

The groups will combine by way of a share exchange, with current Biodel holders retaining a third of the total equity, and some of Albireo’s private backers putting in an additional $10m. The combined group will retain the Albireo name, and its most important asset will be A4250, an ileal bile acid transporter inhibitor for treating liver disorders.

Its lead indication is the orphan paediatric disease progressive familial intrahepatic cholestasis, in which it is in phase II. Last November a poster at the AASLD meeting showed A4250’s ability in 24 volunteers to interrupt enterohepatic circulation of bile acids, which the authors said should benefit patients with cholestatic liver disease.

A more distant target for the project is non-alcoholic steatohepatitis (NASH), though for now Albireo is focused on the orphan indication, which presumably will bring with it premium pricing.

Pivotal development

Armed with its public listing and a $30m cash balance at close, including the $10m being raised in the reverse takeover, Albireo will look to generate phase II data with A4250 later this year, and move this project into a pivotal trial.

It says the cash will pay for phase III, and has the possibility of getting additional funding from a Japan licensing deal with Ajinomoto covering a chronic constipation project, elobixibat.

This is also available for US licensing after Ferring discontinued a partnership with Albireo in the past couple of years. Separately, Albireo says it has another NASH project that it is looking to bring into the clinic.

With orphan diseases managing to stay above the controversy over drug pricing, and with three competing NASH projects set to yield clinical data this year, Albireo might well have caught the mood of biotech investors retrenching in a volatile market.

To contact the writer of this story email Jacob Plieth in London at jacobp@epvantage.com or follow @JacobPlieth on Twitter

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