Menlo Therapeutics, a drug developer focused on developing its single pipeline candidate for dermatological indications and refractory chronic cough, will seek to raise up to $97.75 million in gross proceeds through an initial public offering (IPO), according to an S-1 registration statement filed yesterday with the U.S. Securities and Exchange Commission.

Menlo’s registration statement is among the last, if not the last, IPO filing of this year, in which no fewer than 18 of the Top 25 Biopharma IPOs of 2017 as of December 11 generated $100 million or more in net proceeds, according to a recent GEN list.

Menlo didn’t spell out how much it would set aside toward any of several purposes outlined in the S-1 filing, “due to the uncertainties inherent in the clinical development and regulatory approval process”—let alone exactly 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, Menlo intends to use its IPO proceeds toward advancing the development and manufacturing of serlopitant, its single pipeline candidate—to which the company holds exclusive global rights under a 2012 agreement with Merck & Co.

Serlopitant, once called VPD-737, is a highly selective small-molecule inhibitor of the neurokinin 1 receptor (NK1-R,) being developed as a once-daily, oral tablet to treat pruritus, or itch, associated with dermatologic conditions, such as atopic dermatitis, psoriasis, and prurigo nodularis—as well as to treat refractory chronic cough, a cough that persists for greater than 8 weeks despite treatment of any identified underlying cause.

Serlopitant is now in ongoing Phase II trials in pruritus associated with atopic dermatitis, for which Menlo expects data to emerge in the second quarter of 2018, and in pruritus associated with psoriasis and refractory chronic cough, which the company projects will yield data by late 2018 or early 2019.

Pivotal Trials Planned for 2018

Also in 2018, Menlo said, it expects to launch two Phase III trials of serlopitant in pruritus associated with prurigo nodularis in the first half of 2018, with results expected in the first half of 2020. Upon initiation of these pivotal studies, Menlo has agreed to pay Merck a $3 million milestone payment.

“If these and future trials we may initiate are successful, we could potentially submit a New Drug Application, or NDA, for up to three indications in 2020: pruritus associated with atopic dermatitis, psoriasis, and prurigo nodularis,” Menlo stated in its IPO filing.

Menlo said two completed Phase II trials of serlopitant assessing the drug candidate in more than 380 patients have met their primary and secondary endpoints. One study compared serlopitant to placebo in 257 patients with chronic pruritus. The other assessed serlopitant vs. placebo in 127 patients with prurigo nodularis.

The company also laid out a four-point strategy for long-term growth. In addition to obtaining regulatory approvals for serlopitant in multiple skin conditions, Menlo has committed itself to:

  • Building a specialty sales organization to commercialize and market serlopitant in the U.S.
  • Developing serlopitant for refractory chronic cough.
  • Expanding its pipeline over time, in-house or via licensing agreements, leveraging its development and commercial infrastructure.

Menlo plans to expand that infrastructure, saying that part of its proceeds from the IPO would go toward external development and manufacturing costs primarily associated with supplying serlopitant for clinical trials, as well as developing and validating its commercial manufacturing process for serlopitant in preparation for regulatory approval submissions.

The remainder of proceeds would go toward completing the Phase II studies, advancing serlopitant into Phase III, personnel expenses, and working capital and other general corporate purposes.

Menlo plans to trade its shares on the Nasdaq Global Market under the symbol “MNLO.”

The IPO comes six months after Menlo completed a $50 million Series C financing led by venBio, which joined Novo Holdings A/S, Rock Springs Capital, Aisling Capital, and Bay City Capital as new investors. They joined existing investors from Menlo’s Series A and B financings.

Menlo was formerly known as Tigercat Pharma, a company created to hold the ownership of the serlopitant development program and funded by Velocity Pharmaceutical Holdings, which inked the 2012 licensing agreement with Merck.

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