Arcellx readies for $140-mln IPO. Here’s all you need to know

The IPO market is recovering from the slowdown experienced towards the end of 2021, with pharma companies dominating the scene in the early weeks of the new year. Cancer drug developer Arcellx, Inc. in a recent regulatory filing revealed plans to become a public entity. The move is seen as an important step in its mission to develop cell-based immunotherapies for the treatment of cancers that require special attention.

The pharma company will be offering around 8.3 million shares for a price in the $15-$17 per share range. At the top end of the range, the offering would generate proceeds of around $140 million. It is expected to value the Maryland-based biotechnology firm at $540 million. The stock will trade on the Nasdaq stock market under the ticker symbol ACLX.

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Read management/analysts’ comments on quarterly reports

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The main bookrunners are BoA Securities, Barclays and William Blair. The proceeds from the offering will go mainly into the continued development of CART-ddBCMA, ACLX-001 and ACLX-002, the company’s cell-based drug candidates for multiple myeloma, acute myeloid leukemia and high-risk myelodysplastic syndrome.

The Company

The management team is led by Rami Elghandour who joined as chief executive officer last year. Arcellx has a broad pipeline focused on the key therapeutical areas of multiple myeloma, myelodysplastic syndromes, acute myeloid leukemia and solid tumors. Earlier, it had raised around $115 million in a funding round last year.

Since Arcellx doesn’t have any commercially marketed products, the company is yet to generate revenues and has incurred losses since its inception around eight years ago. For the nine months ended September 30, 2021, it reported a loss of $44.3 million, compared to a loss of $23 million in the corresponding period of the prior year. Loss widened due to a 90% increase in operating expenses. The company ended the period with cash and cash of equivalents of $70 million.

Recently, a phase-I trial of lead candidate CART-ddBCMA yielded positive preliminary results. The FDA has given the formulation fast-track designation, orphan drug designation, and regenerative medicine advanced therapy designation for the treatment of relapsed/refractory multiple myeloma.

Pipeline

The management is currently preparing to initiate a phase-II trial of CART-ddBCMA in late 2022, and file a biologics license with the FDA. Meanwhile, the company’s novel ARC-SparX programs on ACLX-001, ACLX-002 and ACLX-003 are progressing fast. Also, plans are afoot to initiate a phase-I trial of ACLX-001 for the treatment of relapsed/refractory multiple myeloma in the first half.

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Meanwhile, the technology used by Arcellx, which mainly involves generic modification of cells, might face stringent regulatory scrutiny and pose challenges to its drug development program.