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Former Gilead Executive Heading One of 3 Biotechs Going Public

Kronos Therapeutics, Spruce Biosciences and Shattuck latest to IPO

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Sep 27, 2020
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Three more companies are going public to take advantage of this year's feeding frenzy for biotechs: Spruce Biosciences, Shattuck Labs and Kronos Bio Inc. All of them are to be listed on the Nasdaq.

As I wrote in a previous article on GuruFocus, at least 37 venture-backed North American life sciences companies have carried out IPOs year to date, raising a total of $6.7 billion, according to an article in Crunchbase. In all of 2019, 51 public offerings raised $5 billion.

Spruce, based in San Francisco, has filed for an $86 million IPO and will trade under the ticker symbol SRPB. The company is going to use the funds to develop drugs to treat a type of congenital adrenal hyperplasia (CAH). CAH is an inherited condition that prevents patients from making cortisol, a stress hormone produced to respond to stress, illness and injury. CAH also causes the body to overproduce the male sex hormone androgen, according to an article in Xconomy. The current treatments include steroids, but they can lead to unwanted side effects.

Spruce's lead drug candidate tildacerfont is in a phase 2b trial in adults with classic CAH and poor disease control. In the next 12 to 15 months, the company should have a good idea about the drug's effectiveness.

Also searching for a new CAH drug are Millendo Therapeutics Inc. (MLND) and Neurocrine Biosciences Inc. (NBIX).

Spruce is led by Richard King, a veteran of the life sciences industry. Most recently, he was chief operating officer for Adamas Pharmaceuticals Inc. (ADMS), and before that held the same position at the Scripps Institute.

Also stepping up to the plate is Shattuck Labs, which calls Austin, Texas home. The company filed for a $100 million IPO and will trade under the symbol STTK.

Shattuck's focus is oncology, and it has one drug in phase 1 testing for ovarian cancer; it should get some top-line results on in the second half of 2021. The company is also partnering with Takeda Pharmaceuticals Inc. (TAK) on a medication for advanced solid tumors and lymphoma. "Longer-term, we are pursuing additional disease areas, including autoimmune diseases, where our dual-sided fusion protein platforms may provide advantages over current treatment modalities," the biotech said in its S-1.

Shattuck's CEO and co-founder is Taylor H. Schreiber, MD, Ph.D., who invented the company's technology platform. Previously, he was chief scientific officer of Heat Biologics, Inc. (HTBX)

Kronos is also shooting to raise $100 million in its IPO following on the heels of its late August raise of $155 million in private financing. The president and CEO of the Cambridge, Massachusetts-based company is Norbert Bischofberger, who just a few months ago resigned from his position as chief scientific officer at Gilead Sciences Inc. (GILD).

Kronos seeks to develop cancer therapeutics through a precision medicine strategy by targeting dysregulated transcription, a disease mechanism that disrupts the expression of certain genes, which affects when essential proteins are produced by the cell.

In July, Kronos acquired entospletinib, a drug Gilead had put on the back burner, for a "few million" in cash and a slice of equity to get it and another drug, the CEO told Endpoints News. The company plans to begin a phase 1 and 2 study of entospletinib in combination with induction chemotherapy in acute myeloid leukemia patients with certain mutations.

Kronos will trade under the symbol KRON.

Disclosure: The author has positions in Neurocrine Biosciences, Takeda, and Gilead.

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