Undeterred by the Street’s recent biotech selloff, Lumena Pharmaceuticals Inc. took its place on the initial public offering (IPO) runway, seeking to raise $75 million to advance two drugs designed to treat rare cholestatic liver diseases and serious metabolic disorders, including nonalcoholic steatohepatitis (NASH). In its registration statement, the company said it plans to grant underwriters the option to purchase additional shares to cover overallotments.

Filing as an emerging growth company, the San Diego-based biotech said undisclosed existing investors and directors expressed interest in purchasing shares in the IPO. Lumena is seeking to list on Nasdaq as LIVR.

The company has two clinical-stage candidates, LUM001 and LUM002, that inhibit the apical sodium-dependent bile acid transporter, or ASBT, which is primarily responsible for recycling bile acids from the intestine to the liver.

Lead compound LUM001 is currently in phase II development in a liquid formulation for children to treat Alagille syndrome and progressive familial intrahepatic cholestasis. The company expects to file for regulatory approval of LUM001 in both indications with data from the phase II program.

LUM001 also is in phase II studies in a tablet formulation for adults to treat primary biliary cirrhosis and primary sclerosing cholangitis. Pending successful completion, the company plans to meet with regulators and to initiate a phase III program in both indications.

In its filing, Lumena said the estimated initial market across the four indications encompasses some 32,750 patients in the U.S. and 34,500 in Europe.

Lumena licensed LUM001 from Pfizer Inc., of New York, where the compound was investigated as a potential cholesterol-lowering agent. The drug has been studied in more than 1,400 subjects, showing that it knocks down serum bile acid levels with no systemic exposure.

Lumena in-licensed its second asset, LUM002, from Sanofi SA, of Paris, where the ASBT inhibitor also was in development to lower cholesterol.

The once-daily, oral LUM002 now is being studied in NASH, a condition characterized by fat deposits in the liver that lead to inflammation and fibrosis. While the underlying cause of liver injury in NASH is unknown, the condition is strongly associated with obesity, type 2 diabetes, high cholesterol and triglycerides and other metabolic disorders.

Given rampant obesity in the U.S. and Europe, and with newcomers all but crowded out of the hepatitis C virus space, NASH has become the newest target for biotechs seeking a niche in the liver disease market. (See BioWorld Insight, March 31, 2014.)

LUM002 works by blocking bile acid reabsorption, thus reducing hepatic cholesterol levels and increasing colonic bile acid concentrations. The candidate has been evaluated in two phase I studies in healthy volunteers and metabolic disease patients, and Lumena plans to initiate a phase II trial in NASH patients in the second half of the year.

In its filing, Lumena said proceeds from the IPO are expected to fund its operations for approximately two years, enabling it to substantially complete the development program for LUM001 and move LUM002 through phase II.

NASH RECEIVING MORE ATTENTION FROM BIOTECHS

Most of the organizations investigating therapies for NASH are government or academic institutes. In addition to Lumena, only a handful of biotechs are actively pursuing the indication, according to Thomson Reuters Cortellis Clinical Trials Intelligence. At the head of the pack is New York-based Intercept Pharmaceuticals Inc., which recently completed a phase IIb study using obeticholic acid (OCA), a bile acid analogue. The drug activates the farnesoid X receptor, which suppresses the expression of proteins responsible for production of bile acid that causes liver damage. Although Intercept is awaiting full data from the trial, which was stopped early after an interim look showed highly statistically significant improvement using OCA compared to placebo, the biotech is planning two phase III trials to seek approval in NASH. (See BioWorld Today, Jan. 10, 2014.)

Conatus Pharmaceuticals Inc., of San Diego, is developing emricasan, which inhibits caspases responsible for mediating programmed cell death through apoptosis and a second set of caspases that activate pro-inflammatory cytokines. Last month, the company began a phase II in patients with nonalcoholic fatty liver disease, that includes a subset with NASH. Top-line results from the exploratory proof-of-concept trial are expected in the second half of the year.

Galectin Therapeutics Inc. is targeting galectin-3, which promotes the progression of NASH, with its complex carbohydrate drug GR-MD-02. Earlier this week, the Norcross, Ga.-based firm said results from the first cohort in its phase I trial showed that GR-MD-02 had an effect on biomarkers that suggested a therapeutic effect on fibrosis, inflammation and cellular injury.

Gilead Sciences Inc., of Foster City, Calif., is testing its lysyl oxidase-like 2 (LOXL2) antibody, simtuzumab, in NASH patients. Inactivating LOXL2 inhibits collagen cross-linking and accelerates the reversal of liver fibrosis.

In addition, Raptor Pharmaceutical Corp. has orphan drug Procysbi (RP103, cysteamine bitartrate delayed-release), approved by the FDA last year in the initial indication of nephropathic cystinosis. The company is evaluating the drug in Huntington’s disease (HD) and NASH. (See BioWorld Today, May 1, 2013.)

In a research note after Raptor reported promising phase II/III data in HD, Leerink Partners LLC analyst Joseph Schwartz predicted cysteamine “may not be a one-trick pony,” citing the compound’s clinical potential in NASH, “which has begun to receive more attention after [Intercept’s] obeticholic acid surprised investors by its success in phase II. (See BioWorld Today, Feb. 21, 2014.)

Lumena is determined to share in that success. The company plans to commercialize LUM001 on its own in North America and partner in the rest of the world and will seek to strike a deal for LUM002 following phase II in the larger NASH opportunity.

Founded in 2011 by Pappas Ventures, the company has received strong financial support, raising a $23 million series A last year and pulling down $45 million just last month in a series B led by New Enterprise Associates, with participation from Adage Capital Management and RA Capital Management and existing investors, which also include Rivervest and Alta Partners. (See BioWorld Today, May 9, 2013.)

In its S-1, Lumena reported cash and equivalents of $13.9 million and an accumulated deficit of $24.6 million as of Dec. 31, 2013. The company reported 66.6 million common shares outstanding as of April 1.

Citigroup, Cowen and Co. LLC and Leerink Partners are joint bookrunners for the IPO, which is not yet priced.

In other financings news:

Crescendo Biologics Ltd., of Cambridge, UK, raised £2 million (US$3.3 millon), from EMBL Ventures, in a final close of its series A financing. Originally announced in December, the series A now totals £19.5 million. It was led by Imperial Innovations and included new investor Astellas Venture Management. Founding seed investor Sofinnova Partners also contributed significantly to the round. The proceeds are being used to advance Crescendo’s in-house development programs in inflammation and oncology utilizing its VH fragment discovery platform centered on the Crescendo transgenic mouse.

Endocyte Inc., of West Lafayette, Ind., closed its underwritten public offering of 5.2 million shares of stock at $21 each, including the exercise in full by underwriters for their overallotment option, for net proceeds of about $101.8 million. Endocyte anticipates using the net proceeds from the offering for working capital and general corporate purposes. Credit Suisse and Citigroup served as joint book-running managers. Cowen and Co. served as lead manager and RBC Capital Markets, Baird, Wedbush PacGrow Life Sciences and Roth Capital Partners acted as co-managers.

Regado Biosciences Inc., of Basking Ridge, N.J., filed to raise $69 million in an underwritten public offering. Jefferies, Deutsche Bank and Cowen and Co. are acting as joint bookrunning managers for the offering. Shares of Regado (NASDAQ:RGDO) closed Thursday at $11.44, down $1.31, or 10.3 percent.