IPO Update: Inventiva SA Looks For $102 Million U.S

IPO Update: Inventiva SA Looks For $102 Million U.S. IPO

Quick Take

Inventiva SA (IVA) intends to raise $102 million in an IPO of ADSs representing underlying ordinary shares, according to an amended registration statement.

The company is developing treatments for NASH (Non Alcoholic Steato Hepatitis), MPS (Mucopolysaccharidosis) and other conditions.

IVA is preparing to enter Phase 3 trials for its lead candidate for NASH, a large and quickly growing market.

The IPO appears reasonably valued given the firm’s stage and results to-date.

Company & Technology

Daix, France-based Inventiva was founded to advance a pipeline of treatment candidates for various disease conditions including NASH and MPS.

Management is headed by co-founder, Chairman and CEO Frederic Cren, who was previously General Manager, Research of Abbott Laboratories (ABT) and held roles at Solvay Pharmaceuticals.

Below is a brief overview video of Inventiva’s IPO in France (in French):

Source: Boursorama

The firm’s lead candidate is called Lanifibranor and is in Phase 2 trials for the treatment of NASH.

Management expects to have formal meetings at the end of its Phase 2b trials some time in Q4 2020.

Below is the current status of the company’s drug development pipeline:

Source: Company F-1 Filing

Investors in the firm have invested at least $100 million and include BVF Partners, Frederic Cren, New Enterprise Associates, Pierre Broqua, Novo Holdings, and Sofinnova.

Market & Competition

According to a 2018 market research report by Allied Market Research, the global market for NASH treatments was valued at $1.2 billion in 2017 and is expected to reach $21.5 billion by 2025.

This represents a forecast CAGR (Compound Annual Growth Rate) of 58.4% from 2021 to 2025.

Key elements driving this expected growth are a surge in the incidence of diabetes resulting in greater risk of obtaining NASH as well as sharply increased development of treatment options amid greater awareness of the disease and its potential treatments.

Also, a breakdown of the different drug types used to treat NASH is shown below:

Major competitive vendors that provide or are developing treatments include:

  • Allergan
  • Galmed Pharmaceuticals (GLMD)
  • Madrigal Pharmaceuticals (MDGL)
  • Gilead Sciences (GILD)
  • BioMarin (BMRN)
  • Numerous other companies

Financial Status

Inventiva’s recent financial results are atypical of a development stage biopharma, in that they feature some revenue but are also typical in terms of significant R&D and G&A expenses associated with advancing its pipeline.

Below are the company’s financial results for the past two and ¼ years (Audited IFRS for full years):

Source: Company registration statement

As of March 31, 2020, the company had $52.6 million in cash and $17.7 million in total liabilities. (Unaudited, interim)

IPO Details

IVA intends to sell 7.5 million ADSs representing ordinary shares at an expected price of $13.68 and the firm also will conduct a European offering concurrent with the IPO.

Total gross proceeds from the U.S. IPO will be approximately $102.3 million, not including the sale of customary underwriter options.

Assuming a successful IPO at the midpoint of the proposed price range, the company’s enterprise value at IPO for its U.S. capitalization would approximate $522 million.

Excluding effects of underwriter options and private placement shares or restricted stock, if any, the float to outstanding shares ratio will be approximately 19.59%, subject to reallocation and the extent of the European offering.

Per the firm’s most recent regulatory filing, it plans to use the net proceeds as follows:

to complete preparations for and initiate a Phase III clinical trial of lanifibranor for the treatment of patients with NASH;

to complete our planned Phase Ib/II clinical trial of odiparcil in a pediatric population with MPS VI, initiate our planned label Phase IIa extension study of odiparcil in patients 16 years and above with MPS VI and initiate Phase III clinical development of odiparcil as a monotherapy and in combination with ERT for the treatment of adult and pediatric patients with MPS VI;

to advance development of our Hippo pathway signaling program and other pre-clinical programs; and

the balance for working capital and general corporate purposes.

Management’s presentation of the company roadshow is not available.

Listed underwriters of the IPO are Jefferies, Stifel, Guggenheim Securities, H.C. Wainwright & Co., Roth Capital Partners and KBC Securities.

Commentary

IVA is seeking U.S. and European funding for its NASH and MPS clinical trials.

For its lead candidate, the firm has achieved impressive results in its Phase 2b trials, where ‘lanifibranor at a dose of 1,200 mg met the primary endpoint of a reduction in inflammation and ballooning with worsening of fibrosis after 24 weeks of treatment, while continuing to show the favorable tolerability profile observed in prior clinical trials…’

By the end of 2020, management expects to have further meetings about its Phase 3 trial endpoints and investors probably won’t hear about Phase 3 initial data until well in 2022.

The market opportunity for the treatment of NASH is large and expected to grow at a stunning rate over the coming years, so the firm has strong demand dynamics in its favor.

However, IVA has disclosed no research or commercial collaborations and the company faces numerous well-funded competitors developing treatments for NASH, including major pharma firms worldwide.

As to valuation, the IPO appears at the high end of the typical range for biopharma firms, although given IVA’s current status and its trial results to-date, the IPO is reasonably valued.

Expected IPO Pricing Date: July 9, 2020.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Seeking Alpha

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