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Gaithersburg-based Viela Bio files for $150M IPO

(kwanchaidp / Depositphotos.com)

(kwanchaidp / Depositphotos.com)

Viela Bio, the MedImmune spinout that has attracted more than $325 million in venture capital, filed for a $150 million initial public offering last week.

The Gaithersburg-based biotech firm’s IPO filing comes as the firm has moved closer to commercializing its first drug therapy.

Inebilizumab, one of six molecules Viela received during its spinout from MedImmune, was accepted for review for its Biologics License Application by the Food and Drug Administration last week.

The company believes inebilizumab can treat patients with neuromyelitis optica spectrum disorder, a rare autoimmune disease.

Viela Bio filed its Form S-1 Registration Statement with the Securities and Exchange Commission last week, indicating that it wants to go public. The form did not list a potential share price, but it did say that Viela wants to raise $150 million from the offering.

Developing drugs for rare diseases, like Viela developing inebilizumab, can be expensive. It takes a lot of money to get through clinical trials before a company can even begin commercializing the drug. 

But if the drug eventually receives regulatory approval, it could lead to a windfall.

Joga Gobburu, director of the Center for Translational Medicine at the University of Maryland, Baltimore’s School of Pharmacy, said companies know the risk/reward nature of their venture. Gobburu spoke generally and not about Viela specifically.

“That comes with the territory,” he said. “That’s a given in this field that stakes are high and it takes a long time to develop drugs, and the risk is also pretty high.”

In its S-1 filing, Viela said it had put a lot of funding into developing inebilizumab, but the prospect that the drug might not pan out is a risk for potential investors.

The company had a $190.3 million operating loss last year and $26.4 million operating loss through June this year.

“Because of the numerous risks and uncertainties associated with developing pharmaceutical drugs, we are unable to predict the extent of any future losses or when we will become profitable, if at all,” Viela wrote in its filing. “To become and remain profitable, we must develop and eventually commercialize a product or products with significant product revenue.”

The company also warned that even if it started to generate revenue, it may not be enough to become profitable.

Viela was spun out of MedImmune, a subsidiary of AstraZeneca, in February 2018 with $250 million in financing and a promise of creating 100 jobs within five years. The firm announced it had raised $75 million in Series B financing in June.

Viela Bio launched with three clinical and three pre-clinical potential medicines, contributed by MedImmune, including inebilizumab.

The firm’s initial investors included AstraZeneca, Boyu Capital, 6 Dimensions Capital, Hillhouse Capital, Temasek and Sirona Capital.

AstraZeneca is Viela’s largest minority shareholder, with a 38.4% stake in the company, according to its filing. In the filing, Viela said it is dependent on AstraZeneca for “financial services, procurement activities, information technology services, clinical data management and statistical programming, clinical operations and development and commercial activities.”

Smaller companies like Viela often license their products back to larger companies, like AstraZeneca, once they become viable, because larger companies have commercialization infrastructure, Gobburu said.

“The distribution channels are extremely important in the pharmaceutical/biotech commercialization path,” he said. “With the new company, the smaller company, it is possible that they have to join a well-established company for the commercialization.”

Correction: A previous version of this article misquoted Gobburu. He should have been quoted as saying, “The distribution channels are extremely important in the pharmaceutical/biotech commercialization path.”


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