Reneo Pharmaceuticals, a clinical-stage pharmaceutical company, filed an initial public offering (IPO) to raise up to $100 million on March 19, which puts Reneo among life science companies to recently enter the public market. The Carmel Valley-based company focuses on the development and commercialization of therapies for patients with rare genetic mitochondrial diseases.
Reneo applied to list its common stock on the Nasdaq Global Market under the symbol “RPHM.” The IPO is underwritten by Jefferies, SVB Leerink and Piper Sandler and no pricing terms were disclosed on the Form S-1 filing.
Prior to Reneo filing an IPO, the company raised $95 million in Series B funding in January. After the company was founded in 2014, it was acquired for $260 million by Shire, which is now a part of Takeda Pharmaceutical. Together they launched Reneo in 2018.
According to the company’s SEC filing, the IPO proceeds will be used to primarily fund the development of REN001, an oral selective peroxisome proliferator-activated receptor delta (PPARδ) agonist that “has been shown to increase transcription of genes involved in mitochondrial function and increase fatty acid oxidation, and may increase production of new mitochondria.”
Approximately $50 million of the IPO proceeds are aimed at funding research and development of REN001 in patients with Primary Mitochondrial Myopathies (PMM), Fatty Acid Oxidation Disorders (LC-FAOD) and McArdle disease, according to the Form S-1.
REN001, a once-daily pill that targets genes to increase a patient’s metabolic function, received fast track designation from the U.S. Food and Drug Administration (FDA) for treatment in patients with PMM on March 24. The FDA Fast Track designation is designed to expedite the development of investigational treatments that will potentially address unmet medical needs in serious or life-threatening conditions.
“The FDA’s decision to grant Fast Track designation to REN001 signifies an important milestone in our development program,” said Gregory J. Flesher, President and Chief Executive Officer of Reneo. “There are currently no medications approved to treat patients with PMM, and this designation underscores the importance of developing treatment options for patients who suffer from this debilitating disease.”
In addition to the news of Reneo’s advancement in product development, it announced the appointment of Vineet R. Jindal as CFO on March 22.
Flesher, who joined Reneo as CEO in November 2020 has more than 25 years of experience in the biopharmaceutical industry and leading companies through major growth. He most recently served as CEO of Novus Therapeutics (Nasdaq: NVUS) when it went public in 2017 and through its acquisition of Anelixis Therapeutics in 2020.
Opportunity in Life Science Sector
During the past twelve months of the pandemic, while all eyes have been on the life science community for the development of COVID-19 related therapies and vaccines, the broader life science industry and companies like Reneo who focus on specialized, rare disease therapeutics have also benefited from this increased attention to public health, said Rob Lake, managing director and head of life sciences at Runway Growth Capital.
“The recent coronavirus pandemic has increased awareness of the need for medical innovation and as a result 2020 was a remarkable year in terms of life sciences investments, biotech IPOs, and valuations,” Lake said. “…The current market dynamics – strong demand for investing in biotechnology coupled with high valuations – make it an opportune time for a clinical-stage biotech public offering.”
Selena Chaisson, MD, Director of Healthcare Investments at Bailard, a boutique wealth and asset manager in the Bay Area added that, “not only are non-COVID-related life science companies experiencing growth, but many of them may also experience their highest growth rate since the pandemic began,” as cases subside.
One of the risk factors Reneo acknowledged in the S-1 filing was “the evolving and ongoing COVID-19 global pandemic” which could impact manufacturing, clinical trials and business operations as it has across the industry. Nevertheless, Chaisson spoke to the opportunity for life science companies to build on increased awareness from consumers and investors alike.
“With business environments normalizing, many life science companies stand to benefit from increased interaction with both caregivers and patients, higher medical procedure volumes, faster clinical trial enrollment, and more efficient distribution of medical data,” Chaisson said.