A RMI portfolio company sucessfully went for an IPO

Print 02 November 2020

On October 30, 2020, Atea Pharmaceuticals, Inc., a RMI portfolio company, went for an IPO at NASDAQ. The company is engaged in research and development of innovative products for antiviral therapy, including against tCOVID-19.

Atea offered 12.5 million shares of common stock at $24 per share. The IPO volume amounted to $300 million, and the companys' capitalizaion reached $1.94 billion. The placement took place on NASDAQ; company's ticker is: AVIR. On the first day of trading, the company's shares rose by more than 25%. The IPO was organized by the largest investment banks: J.P. Morgan, Morgan Stanley, Evercore ISI, William Blair.

Funds from the IPO will be used primarily for clinical research, as well as to support the company's operating activities. The company's main program (AT-527) is the creation of a drug with direct antiviral action against the SARS-CoV-2 virus, which is the cause of the new coronavirus infection COVID-19. This program is currently in the second phase of clinical trials. The company also conducts clinical trials in the treatment of hepatitis C, human respiratory syncytial virus (RSV) and dengue fever.

RMI acquired a stake in Atea's Series A financing in April, 2014, and did not participate in the IPO.

In addition to RMI, Atea's main shareholders include the following venture funds: Morningside Investments Limited, Cormorant Private Healthcare Fund, JPM Partners, Bain Capital Life Sciences Investors, ABG-ATEAB Limited, as well as the company's key management.

“The investment in Atea is RMI's most successful deal and a classic venture success story. We invested in the company in 2014 at the very initial stage of its formation. Before our eyes, Atea has gone through the entire path of technological development - from the search for a potentially effective and safe candidate for direct antiviral action in laboratory experiments and preclinical studies on animal models, - to obtaining preliminary, but significant, practical clinical results in the treatment of a number of diseases that pose a challenge to all of humanity “, - said Olga Shpichko, Managing Director of the Rusnano group, making comments on the Atea's IPO.

However, she noted that Atea has yet to convincingly prove the effectiveness of the drug in the treatment of COVID-19 in a large and final phase 3 clinical trial in 2021. “However, we are confident that a huge foundation in the form of a solid scientific and clinical base will allow the company to obtain impressive results and repeat success in other areas of clinical development, primarily in the field of treatment of hepatitis C, which is also an acute social problem worldwide,” - she emphasized.

In connection with the global pandemic of the new coronavirus infection COVID-19, which unfolded globally in February-March 2020, the company quickly switched the main focus of its research from dealign with Hepatitis C to combating the SARS-CoV-2 virus. In May-October, in two tranches, a Series D investment round totaling at $215 million was raised. The start of the second phase clinical trial of the candidate AT-527 in the treatment of COVID-19 occurred in May 2020. Results from the study are expected in early 2021, after which the company plans to begin the final phase 3 clinical trial for the treatment of COVID-19 also in 2021.

In October 2020, the company entered into a licensing agreement with the big pharma company Roche (Switzerland), under which the rights to the treatment candidate were assigned to Roche (excluding the US). The upfront payment from Roche, under the terms of the agreement, amounted to $350 million. The agreement also provides for subsequent significant miletone payments depending on the progress of the clinical program against COVID-19 and royalties on future sales.

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