Vitae Pharmaceuticals, which uses software to develop small molecule drugs for type 2 diabetes and Alzheimer's, announced terms for its IPO on Monday. The Fort Washington, PA-based company plans to raise $60 million by offering 5.0 million shares at a price range of $11 to $13. Insiders intend to purchase $11 million worth of shares on the offering (18% of the deal). At the midpoint of the proposed range, Vitae Pharmaceuticals would command a fully diluted market value of $198 million.
The company claims its drug delivery platform, Countour, uses artificial intelligence and sophisticated algorithms to model new drugs and predict their effectiveness. It targets large market opportunities with unmet needs, and recently entered Phase 2 trials for type 2 diabetes and is in Phase 1 trials for Alzheimer's. Most drug discovery platforms this year have been based on gene therapy, but Vitae emphasizes its advanced computing technology to discover new small molecule therapies.
Vitae is notable for its collaboration with Germany-based Boehringer Ingelheim (BI), which has provided over $150 million from research agreements and equity funding. BI will have exclusive commercialization rights to both its type 2 diabetes and Alzheimer's products, while Vitae will receive royalty payments based on global sales. The biotech can also receive up to $600 million from BI in milestone payments. Vitae has exclusive rights over three preclinical candidates that target autoimmune disorders (such as psoriasis, multiple sclerosis and rheumatoid arthritis), acute coronary syndrome and eczema.
Other biotech IPOs in 2014 that target type 2 diabetes and Alzheimer's include Zafgen (ZFGN) and Adamas (ADMS), respectively. Vitae's primary shareholders include Prospect Venture Partners, New Enterprise Associates, Venrock, Atlas Venture, Boehringer Ingelheim and Allergan.
Vitae Pharmaceuticals, which was founded in 2001 and booked $23 million in collaboration revenue for the 12 months ended June 30, 2014, plans to list on the NASDAQ under the symbol VTAE. Stifel and BMO Capital Markets are the joint bookrunners on the deal. It is expected to price during the week of September 22, 2014.
