Inflammatory disorder drug developer Acelyrin has a therapeutic candidate in late-stage development in three different indications—each of them offering the biotech the chance to compete favorably against currently available blockbuster biologics. With key data readouts expected in the coming year, the young company is now testing the IPO waters to see if it can raise capital to support its lead drug and others in its pipeline.

Acelyrin filed IPO paperwork with securities regulators late Thursday. The Los Angeles-area company has not yet said how many shares it plans to offer and in what price range. But the filing indicates some financial flexibility in case it’s not able to complete the IPO in the near term. Acelyrin has applied to list its shares on the Nasdaq under the stock symbol “SLRN.”

Many of the drugs available for treating inflammatory disorders are large molecules, antibodies dosed as infusions. Acelyrin describes its lead drug candidate, izokibep, as a small protein. At about one-tenth the size of an antibody, the smaller size allows for dosing via subcutaneous injection. Once inside the body, the company says the molecule’s smaller size allows for better penetration into tissue.

Izokibep was designed to block IL-17, a signaling protein associated with inflammation. The drug has reached Phase 3 testing in hidrandentis suppurativa, a rare inflammatory skin disorder. It’s also in pivotal testing in psoriatic arthritis and uveitis, which is inflammation in the eye. The competition in each of the indications is fierce. The list of approved uses for blockbuster AbbVie drug Humira includes hidrandentis suppurativa and uveitis. In psoriatic arthritis, Acelyrin could compete against Humira along with products from Novartis, Eli Lilly, Johnson & Johnson, Amgen, UCB, and Bristol Myers Squibb. Less expensive biosimilars are also entering the market, adding more price competition in this  space.

Preliminary data from the Phase 2b/3 study of izokibep in hidrandentis suppurativa are expected in the second half of this year, according to the IPO filing. Last June, Acelyrin reported Phase 2 psoriatic arthritis data indicating its drug could be more effective than standard-of-care treatments. A Phase 2b/3 test in psoriatic arthritis is expected to report preliminary data in mid-2024, which is the same timeline projected for the Phase 2b/3 uveitis study.

Acelyrin is exploring additional indications for its lead drug. A Phase 3 test is planned in axial spondyloarthritis, a rare form of arthritis affecting the spine. Though the drug has not gone through Phases 1 and 2 in axial spondyloarthritis, Acelyrin said it intends to rely on the clinical data from the psoriatic arthritis studies to support an application seeking to proceed with a pivotal study in the spinal indication. There’s precedent for this approach, but Acelyrin concedes that the FDA may still require the company to complete a Phase 2 test.

Acleyrin’s next drug candidate is relatively new to the company. In January, it acquired ValenzaBio in an all-stock deal. The transaction brought the antibody lonigutamab, a potential treatment for thyroid eye disease. This rare disease currently has only one FDA-approved treatment, the blockbuster Horizon Therapeutics drug Tepezza. Lonigutamab is in Phase 1/2 testing. Acelyrin said the IPO proceeds will support lonigutamab through the reporting of preliminary data in its Phase 1/2 clinical trial in thyroid eye disease.

A third Acelyrin drug candidate, SLRN-517, is in development for chronic urticaria, also known as chronic hives. This antibody drug is preclinical. Acelyrin said IPO proceeds will support development of SLRN-517 through proof-of-concept in a Phase 1 test in chronic urticaria.

Acelyrin has secured more than $550 million in committed capital, of which $400 million has been funded, the company said in the filing. The biotech closed a $250 million Series B round in 2021, than raised another $300 million in Series C financing 10 months later. Funds managed by Matrix Capital Management and Westlake Village BioPartners are the largest shareholders, holding stakes of 15% and 13% respectively, according to the filing.

As of the end of March, Acelyrin’s cash position was $289.2 million, according to the filing. That figure is unaudited and may change. The company said it has an additional $150 million available from its most recent financing, which should help support the company for a little while longer. The filing states that if the IPO is not completed by June 30, Acelyrin will be able to tap into that additional cash, subject to certain conditions.

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