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1 September 2017

Big deal: Nightstar to light up stock market

The University of Oxford spinout has filed for an $86.25m initial public offering in the US just three years after being founded.

Author: Thierry Heles, editor

Initial public offerings have been a rare sight in the university venturing world so far this year. In fact, not much has happened since G1 Therapeutics, an oncology therapy developer spun out from North Carolina University, filed for an $115m IPO back in April.

Nightstarx, a spinout from University of Oxford that is working on retinal gene therapies, filing for an initial public offering worth $86.25m in the US yesterday therefore could already be considered a big deal in and of itself. But the deal is particularly newsworthy even beyond that.

Oxford University Innovation, the institution's tech transfer office, began working with Robert MacLaren, professor at the Nuffield Laboratory of Ophthalmology, in 2009 to protect the technology, before the spinout was formally incorporated in Janaury 2014 with a £12m ($15.5m) commitment from Syncona, a subsidiary of charity Wellcome Trust. Chris Hollowood, chief investment officer at Syncona, joined Nightstarx as chairman at the same time.

Notably, Syncona's investment actually constituted one of the largest initial investments in a spinout in Europe.

Nightstarx is working on a range of therapies for rare, inherited retinal diseases. The spinout's lead candidate, NSR-REP1, targets choroideremia, a retinal dystrophy for which there are no efficient treatments currently on the market. The condition ultimately leads to blindness.

The therapy uses a modified virus, known as AAV.REP1, to correct genetic information of cells. It is injected into the retina under local anaesthesia.

A phase 1/2 clinical trial carried out by University of Oxford has already confirmed the long-term benefits of NSR-REP1, including the improvement of a patient's vision.

Syncona returned in November 2015 to support a $35m series B round, led by New Enterprise Associates (NEA). That capital took Nightstarx all the way through to this past June, when the spinout raised $45m from Syncona, New Enterprise Associates, Wellington Management and Redmile Group.

Chris Hollowood said at the time of the series C round: “As an original investor in Nightstar, our goal from day one was to build a global gene therapy leader with the capability of developing multiple programs for inherited retinal diseases.

“We welcome Wellington Management and Redmile Group as investors and look forward to working with them and NEA to fulfil Nightstar’s potential.”

The fast evolution from formation just over three years ago to initial public offering is unusual not just for university venturing but for the healthcare sector in general. Treatments often take many years to be developed and the road to success is littered with pitfalls. One adverse reaction in a clinical trial can easily set back commercialisation or, in the worst case, mark the end of the road for a drug candidate.

The flotation, which will consist of American depositary shares, will bring some structural changes for the spinout: the company will be listed on the stock exchange as Nightstar Therapeutics and Nightstarx will become a wholly-owned subsidiary thereof.

Although Nightstarx did not reveal in its filing how many shares its external stakeholders own, Syncona, New Enterprise Associates and Wellington Management are all listed as retaining more than 5%. In any case, it would seem that Syncona stands to celebrate a significant exit.

Jefferies, Leerink Partners, BMO Capital Markets, Wedbush and Chardan Capital Markets will serve as the underwriters for the initial public offering, which is set to take place on the Nasdaq Global Market.

Copyright Mawsonia Limited 2010. Please don´t cut articles from www.globaluniversityventuring.com or the PDF and redistribute by email or post to the web without written permission.

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