Despite Market Drama, Passage Bio Launches $216 Million IPO

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Launching an initial public offering (IPO) the same week the stock market plunged 1,190 in a single day may just be bad luck, but it doesn’t seem to have negatively affected Passage Bios IPO. The Philadelphia-based biotech company offered 12 million shares at $18 per share and raised $216 million, 72% more than originally expected. It is trading on the Nasdaq under the PASG ticker symbol.

In September 2019, the company closed on a $110 million Series B round led by Access Biotechnology with participation from existing investors, including OrbiMed, Frazier Healthcare Partners, Versant Ventures, Lily Asia Ventures, New Leaf Venture Partners and Vivo Capital. New investors included Boxer Capital of Tavistock Group, Highline Capital Management, Logos Capital and Sphera Funds Management. Since launch, the company raised $225.5 million prior to the IPO.

Passage Bio focuses on gene therapy. It expects to launch clinical trials for its lead programs in the first half of this year, gene therapies for GM1 gangliosidosis and frontotemporal dementia (FTD). In the latter half of the year, it hopes to launch a program in Krabbe disease. Passage Bio has licensed two more indications from the University of Pennsylvania, with an option to license another seven indications.

Also in September, Passage announced it had licensed a sixth gene therapy development program from Penn. This was for Charcot-Marie-Tooth Neuropathy Type 2A (CMT2A), a group of inherited, progressive, chronic peripheral neuropathies.

The new funds raised will be primarily used to push the top programs into the clinic. The breakdown is about $43 million for PBGM01 for GM1 gangliosidosis, $45 million to PBFT02 for frontotemporal dementia, and $37 million for PBKR03 for infantile Krabbe disease.

GM1 gangliosidosis is an inherited lysosomal storage disease that progressively destroys nerve cells in the brain and spinal cord. GM1 gangliosidosis is triggered by mutations in the GLB1 gene. There are three general types, classic infantile (type 1), juvenile (type 2) and adult (type 3).

Frontotemporal dementia is a group of uncommon brain disorders that affect the frontal and temporal lobes of the brain. It is sometimes confused with Alzheimer’s disease, although it typically affects patients between the ages of 40 and 65, and in addition to the memory and cognition issues, is often marked by dramatic changes in personality.

Krabbe disease is an inherited disorder that destroys the protective coating, or myelin, of nerve cells in the brain and nervous system. It typically develops in infants before six months of age, resulting in death by the age of two years.

The company was founded by Stephen Squinto and Tachi Yamada in partnership with James Wilson. Wilson is the director of the Gene Therapy Program and of the Orphan Disease Center at the Perelman School of Medicine at the University of Pennsylvania. He is Passage Bio’s chief scientific advisor.

Bruce Goldsmith, partner at Deerfield, took over as chief executive officer from OrbiMed’s Stephen Squinto shortly before the IPO.

Although gene therapy is a hot new area, investor confidence in Passage Bio is likely related to Miller’s involvement, in that any commercial product out of the company is almost certainly years away.

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