Talk of PregLem IPO could be on the money

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Rumours that PregLem is considering braving the European equity markets might not be far from the mark. The venture capital-backed Swiss drug developer is close to filing its experimental therapy for uterine fibroids for approval in Europe, and is well on its way to looking like the sort of company public investors might be prepared to back.

The only European healthcare IPOs to get away this year have been three small French companies, a trend attributed to financial support from a government-backed fund that has been actively backing both private and public fundraising in the last year. As such, the last comparable European flotation is probably Belgium’s Movetis, which raised almost €100m late last year. Movetis waited for approval of its constipation candidate Resolor before officially launching its IPO, and given that the public markets are still not exactly bursting with optimism, PregLem could well be considering a similar strategy.

Positive results

Bloomberg News reported last week that PregLem had appointed Credit Suisse for a possible flotation, citing two unnamed sources; the company declined to comment on the article today. However, as EP Vantagewrote last month, PregLem always looked like it would head towards a public life at some point (EP Vantage Interview - Preglem future hanging on trial results, June 1, 2010).

Since then, the company has announced positive results from the second phase III study of its uterine fibroid candidate, ulipristal. Results from the pivotal programme, consisting of two trials called Pearl 1 and Pearl 2, found the drug was better than placebo at reducing bleeding and fibroid volume in women with symptomatic uterine fibroids with heavy bleeding leading to anaemia, and equally as effective as Abbott Laboratories’ Lupron. The comparative trial revealed superior safety and tolerability to Lupron, currently the only approved therapy for fibroids.

Lupron is a gonadotropin-releasing hormone (GnRH) antagonist and generated $800m last year; it is also on the market for prostate cancer and endometriosis. However, the big drawback of these drugs are the side effects which largely limit their use, including bone mineral loss and castration symptoms.

Whilst the GnRHs work by suppressing levels of oestrogen, ulipristal comes at the problem from a different angle, by reversibly blocking the progesterone receptor in target tissues in the uterus, cervix and ovaries, avoiding any of the side effects of the GnRH class.

Ulipristal has been on the market in Europe since October last year as an emergency contraception called EllaOne, sold by HRA Pharma. Last month an FDA advisory committee voted unanimously that the product was safe and effective, paving the way for approval in the US as well, where Watson Pharmaceuticals will commercialise the product as an emergency contraceptive.

Competition?

PregLem believes all this means that ulipristal could be a significantly improved option for women with fibroids; currently treatment options are GnRH drugs or surgery. Development in other benign gynaecological disorders is also planned.

However, there could be competition on the horizon. Interestingly, Abbott Laboratories signed a sizeable licensing deal over a phase IIb endometriosis candidate last month, paying US drug developer Neurocrine Biosciences $75m upfront for worldwide rights to the gonadotropin-releasing hormone (GnRH) antagonist elagolix (Neurocrine wastes no time delivering deal but hurdles remain, June 16, 2010). Like other drugs of its class, elagolix works by suppressing levels of oestrogen, but the companies believe this next-generation GnRH avoids those symptoms by only partially suppressing oestrogen, maintaining the main sex hormone oestradiol in the low-normal range.

Neurocrine has so far focused on endometriosis, but Abbott says development work in fibroids is likely to commence. Whilst PregLem is more advanced than Neurocrine in Europe, the opposite is probably true in the US, and a big name partner has already been found.

PregLem bought US rights to ulipristal earlier this year, to all benign gynaecological disorders. Plans are afoot to start development for uterine fibroids in the US, whilst a marketing partner will also be sought for this territory. How the company succeeds in its US strategy could have a big bearing on the success of any IPO. The fact that Neurocrine managed to secure such a large deal for its mid-stage candidate certainly bodes well, and a big name partner for PregLem would certainly help attract investors. The fact that the active ingredient is already on the market is another plus point, as this should help with regulatory reviews of safety.

All of which means if the regulatory review of ulipristal goes well, IPO speculation could be confirmed. And if the amount of money Abbott was prepared to give Neurocrine is anything to go by, this is an attractive market, meaning a trade sale could also be on the cards.

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