Apogee Therapeutics set to go public. Here’s what you need to know

The US IPO market has remained mostly sluggish so far this year, continuing the weakness experienced in 2022. Meanwhile, there is speculation that activity would pick up in the second half of the year, with recent listings by big companies like Cava Group adding to the optimism.

Biotechnology company Apogee Therapeutics, Inc. recently filed papers with the Securities and Exchange Commission for an initial public offering, aiming to raise up to $100 million. However, it is yet to reveal the number of shares being put on sale and the offer price. After regulatory approval, the stock will trade on the Nasdaq stock exchange under the ticker symbol APGE. Jefferies, TD Cowen, Stifel, and Guggenheim Securities are the main underwriters for the offering.

The Company

Founded in 2022 after a spinout from Paragon Therapeutics, Apogee is headquartered in San Francisco and offers research and development of therapies for novel biologics for inflammatory and immunological diseases. The focus is on developing differentiated therapies for the treatment of atopic dermatitis, chronic obstructive pulmonary disease, and related inflammatory and immunology indications. Apogee’s antibody programs are designed to overcome the limitations of existing therapies by targeting well-established mechanisms of action and incorporating advanced antibody engineering to optimize half-life and other properties.

The lead programs are APG777, for the treatment of atopic dermatitis, and APG808 for the treatment of chronic obstructive pulmonary disease, which are at advanced stages of development. Once approved, APG777 will be competing with the top candidates of Regeneron and Eli Lilly in this segment. Meanwhile, the company is awaiting regulatory approval to commence human clinical trials in Australia and expects to initiate a phase-1 trial of APG777 in the second half of 2023. It is also looking to nominate a development candidate for the APG808 program this year and to file an investigational new drug application for its foreign equivalent prior to the initiation of any clinical trials.

Proceeds

​The management intends to use proceeds from the offering to fund clinical studies including a potential phase-II and manufacturing of the APG777 program; fund trials and manufacturing of the APG808 program; fund studies and manufacturing of the APG990 program and fund preclinical studies and manufacturing of the APG222 program. The remainder of the proceeds will be used for additional research & development activities and for working capital & general corporate purposes.

As far as risks to the business are concerned, Apogee is a preclinical company that is in the early stages of development. In the absence of marketable products, it is likely to continue incurring losses in the near future. Also, the company is substantially dependent on the success of its two lead candidates, which might face stiff competition from established drugs once launched.

Financials

The drug developer has incurred a total loss of $39.8 million or $16.16 per share during the period from its inception in February 2022 to December 2022. That mainly reflects research & development expenses totaling $27.8 million. At the end of the period, the company’s cash balance stood at $151.9 million.