Cancer Immunotherapy Developer Armo BioSciences Files for Up-to-$86.25M IPO

Armo BioSciences, a late-stage developer of cancer immunotherapies, will seek to raise up to $86.25 million in gross proceeds through an initial public offering, according to an S-1 registration statement filed with the U.S. Securities and Exchange Commission on the last business day of 2017.

Armo has yet to spell out how much it would set aside toward any of several purposes outlined in its S-1 registration statement, filed December 29 and announced by the company that evening after the close of the markets. The company also did not specify how much in net proceeds it expected to generate, which would depend on how much money the company agrees to raise in the IPO.

According to its filing, Armo intends to use its IPO proceeds in part toward funding its Phase III clinical trial for its lead candidate AM0010 in pancreatic ductal adenocarcinoma (PDAC).

Armo said it also plans to use its IPO proceeds to fund two planned Phase IIb trials of AM0010 in non-small-cell lung cancer (NSCLC), as well as to fund development of AM0010 in unspecified additional indications, development of other product candidates in its pipeline, and other “general corporate purposes” that may include the hiring of additional personnel, capital expenditures, and the costs of operating as a public company.

AM0010 is a long-acting form of recombinant human Interleukin 10 (IL-10), a naturally occurring immune growth factor in humans that stimulates the survival, expansion, and cytotoxic potential of CD8⁺ T cells. By linking IL-10 to polyethylene glycol (PEG), Armo has increased the size of IL-10 to prolong its circulation time in the body of patients, which according to the company maximizes its capability to activate antitumor CD8⁺ T cells.

Armo has cited results from an earlier Phase I/Ib clinical trial assessing AM0010 in 350 cancer patients across more than 14 different types of cancer. In that study, AM0010 showed the ability to increase the number of activated CD8⁺ T cells in the blood and tumors of patients and achieve objective tumor responses—including partial and complete responses—in patients treated with AM0010 as a single agent or in combination with chemotherapeutic drugs or two anti-programmed cell death protein 1 (PD-1) checkpoint inhibitors, Bristol-Myers Squibb’s Opdivo^® (nivolumab) and Merck & Co.’s Keytruda^® (pembrolizumab), the company said.

Phase III Trial Launched

Based on the results from the Phase I/Ib study, Armo has launched its SEQUOIA Phase III trial of AM0010 in PDAC. Approximately 566 PDAC patients will be enrolled in the trial, designed to compare AM0010 plus FOLFOX, a combination of chemotherapy drugs, to FOLFOX alone as second-line therapy in patients with PDAC that have progressed during or following a first-line gemcitabine-containing regimen. Overall survival is the primary endpoint with progression-free survival, objective response rate, and safety as secondary endpoints.

“We initiated this trial in the fourth quarter of 2016, enrolled the first patients in early 2017, and we expect the first interim analysis to be conducted in early 2018,” Armo stated.

The second interim analysis, which could provide the basis for a Biologics License Application (BLA) submission to the FDA, is expected to be conducted in 2020, the company added.

AM0010 has received orphan drug designations from the FDA and European Commission as a monotherapy for the treatment of pancreatic cancer. The FDA has also granted Fast Track designation for AM0010 in combination with Folfox as a second-line therapy in patients with pancreatic cancer.

Also in Armo’s pipeline:

• AM0001, a monoclonal antibody designed to activate CD8⁺ T cells by blocking the interaction between PD-1 and programmed death ligand-1 (PD-L1). Armo said it is performing Investigational New Drug (IND)-enabling studies with AM0001.

• AM0015, a pre-IND recombinant human interleukin-15 (IL-15) immune system activator designed to induce proliferation of CD8⁺ T cells in the blood of cancer patients. Armo said it is planning for the future development of AM0015 in combination with AM0010.

• AM0012, a preclinical recombinant human Interleukin-12 (IL-12) immune system activator also designed to induce activation and proliferation of CD8⁺ T cells.

Armo’s registration statement disclosed net losses of $27.5 million in 2015, $33.6 million in  2016, and $27.9 million for the nine months ended September 30, 2017, up from $22.0 million for January–September 2016.

Until now, Armo said, it has financed its operations primarily through the sale of $177.1 million of convertible preferred stock, including $10 million raised by ACIR BioSciences (ACIR), which Armo acquired in October 2015.

On August 29, Armo said it completed a $67 million Series C-1 private financing intended to launch Phase II/III studies of AM0010 in NSCLC and renal cell cancer, as well as to support the ongoing pivotal Phase III clinical trial in advanced pancreatic cancer. The private financing was also intended to fund further development of additional immunotherapy product candidates that include monoclonal antibodies directed against checkpoint inhibitors.

The C-1 financing was led by new investor Qiming Venture Partners’ U.S. Healthcare Fund, with additional new investors Decheng Capital, Sequoia Capital, Quan Capital, and RTW Investments, as well as existing investors Kleiner Perkins (KP), OrbiMed, DAG Ventures, NanoDimension, HBM Healthcare Investments, GV (formerly Google Ventures), Celgene, and certain private investment funds advised by Clough Capital Partner.

Armo’s registration statement was the last IPO filing of 2017, a year in which the IPO market recovered enough that 18 of the Top 25 Biopharma IPOs of 2017 as of December 11 generated $100 million or more in net proceeds.