Two Rare Disease Biotechs Go Public, Raising Combined $222 Million in IPOs

Rare disease drug developers VectivBio and Reneo Pharmaceuticals raised a combined $222 million in initial public offerings.

Launched in January 2020 as a spinout from Therachon after its acquisition by Pfizer, Swiss biotech VectivBio raised $127.5 million through an initial public offering of 7.5 million shares at $17 a share. Shares will trade on the Nasdaq Global Market under the symbol “VECT.” In addition, Vectiv has granted the underwriters a 30-day option to purchase up to an additional 1.1 million shares at the initial public offering price, less the underwriting discounts and commissions.

VectivBio’s lead experimental candidate, apraglutide, a next-generation GLP-2 analog, is in phase 3 studies for the treatment of short bowel syndrome (SBS).  SBS is a rare condition that results from extensive intestinal resection due to chronic inflammatory bowel disease, acute events such as trauma, mesenteric infarction, bariatric surgery or congenital abnormalities. Symptoms of SBS include diarrhea, dehydration, malnutrition, and weight loss.

To survive, patients with severe forms of SBS require parenteral support (PS), the intravenous delivery of essential nutrients, calories and fluids. For some patients, PS must be delivered for 10 to 15 hours per day, a significant burden that severely diminishes quality of life. In addition, people receiving chronic PS are exposed to increased rates of liver disease, and to an increased risk of infections due to the chronic presence of an infusion port positioned in a central vein.

Apraglutide is designed to increase the intestine’s ability to absorb fluids and nutrients, thereby minimizing the burden of parenteral support and has the potential to be a best-in-class treatment for SBS, designed for once-weekly dosing with the potential to address the needs of patients across the anatomical disease spectrum that characterizes SBS.

Reneo Pharmaceuticals, a company focused on the development and commercialization of therapies for patients with rare, genetic, mitochondrial diseases, raised $93.8 million through an initial public offering of 6.25 million shares at $15.00 per share. Shares will trade on the Nasdaq Global Market under the symbol “RPHM.” In addition, Reneo has granted the underwriters a 30-day option to purchase up to an additional 937,500 shares at the public offering price, less underwriting discounts and commissions.

Reneo’s lead experimental candidate REN001 is an oral, once-daily experimental drug known to control several genes involved in mitochondrial activity. Mitochondria are the powerhouses of the cell, where carbohydrates, fats, and proteins are used to generate the energy the body needs. Reneo is developing REN001 as a first-in-class treatment option to improve cellular energy metabolism by enhancing mitochondrial function and potentially increasing the number of mitochondria.

The new funding will be used to achieve several key clinical milestones, including completion of a global phase 2 study in primary mitochondrial myopathies (PMM), a group of rare, often life-threatening diseases, caused by mutations in mitochondrial or nuclear DNA. These mutations hamper the ability of affected cells to break down food and oxygen and produce energy. There are no approved drugs for the treatment of PMM.

Reneo is also testing REN001 as a treatment for fatty acid oxidation disorders (FAOD), a group of rare, potentially life-threatening genetic metabolic disorders that affect the body’s ability to use fats from food as a source for energy, and McArdle disease (also known as glycogen storage disease type 5), a rare genetic metabolic disorder that affects the body’s ability to use muscle glycogen (stored glucose) as a source of energy for skeletal muscles.