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14 November 2017

Arsanis chases bigger IPO dream

EMBL-backed Arsanis hopes to sell 3,125,000 shares priced at $15 to $17 and raise a total of up to $61m in its initial public offering.

Author: Thierry Heles, editor

Arsanis, a US-based immunotherapy producer that is backed by research institute European Molecular Biology Laboratory, has set its pricing range at $15 to $17 per share.

The company had previously targeted up to $57.5m in its initial public offering on the Nasdaq Global Market, but could now secure up to $61m in proceeds if it floats at the top of its range. It aims to sell 3,125,000 shares in the offering.

Founded in 2010, Arsanis is developing monoclonal antibody-based immunotherapies for infectious diseases. Its approach means treatments target specific bacterial and viral pathogens while minimising collateral damage from antimicrobial overuse, resistance and microbiome disruption.

The company’s lead drug candidate, ASN100, aims to prevent pneumonia in high-risk, mechanically ventilated patients caused by Staphylococcus aureus. The product is currently in phase 2 clinical trials.

Arsanis was co-founded by Tillman Gerngross, professor of engineering at Dartmouth University’s Thayer School of Engineering, Eszter Nagy and Errik Anderson.

The company had cash reserves of $26.3m as of September 30 and will use the majority of proceeds, together with the existing capital, to fund the further development of ASN100 for pneumonia as well as adapt it for other indications.

The proceeds will also help develop additional preclinical candidates and advance the current pipeline, except for ASN500, a treatment to prevent respiratory syncytial virus infection whose development is being funded by philanthropic organisation Bill and Melinda Gates Foundation.

Arsanis raised $95m in equity and debt financing, most recently obtaining $45.5m in a series D round in April 2017 that included EMBL Ventures, the investment arm of European Molecular Biology Laboratory.

Led by Bill and Melinda Gates Foundation, the series D round also featured GV, the early-stage investment division of diversified conglomerate Alphabet, and Alexandria Venture Investments, a subsidiary of real estate trust Alexandria Real Estate Equities.

Other investors in the series D included OrbiMed, Polaris Venture Partners, SV Health Investors, NeoMed, and Anna Maria and Stephen Kellen Foundation.

Polaris, SV Life Sciences and OrbiMed are Arsanis’ largest external shareholders, owning 17.79% each, which will be reduced to 12.65% following the initial public offering.

Bill and Melinda Gates Foundation’s stake will drop from 9.39% to 6.67%, while NeoMed’s stake will go from 7.38% to 5.25%.

GV and Section 32, a venture capital fund launched by GV founder Bill Maris, each hold 5.87% ahead of the offering, which will be reduced to 4.17%.

Citigroup Global Markets, Cowen and Company and Piper Jaffray are acting as underwriters for the offering and have the option to purchase up to an additional 468,750 shares.

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