Under WSA’s IPO Scanner: Motif BioSciences Inc.

Motif raised about $25 million from both its US offering and European placement

The US IPO market has so far witnessed 102 IPOs being priced, raising a total of $18.5 billion as of December 12th, 2016. So far in Q4 FY16, the US market has witnessed 27 IPOs being priced, raising roughly $6.2 billion. As of December 12th, 2016, 119 IPOs have been filed, of which 18 have been filed in Q4 FY16. Of the total IPOs priced as of December 12th, 2016, Healthcare accounted for 41 deals or 40% of the total number of IPOs, raising proceeds of $3.4 billion, followed by Technology with 20% or 21 deals raising $3.1 billion.

Source: Renaissance Capital
Source: Renaissance Capital

Company overview

m2Motif BioSciences Inc. is a clinical stage biopharmaceutical company that specializes in developing novel antibiotics to treat serious and life-threatening infections caused by multi-drug resistant bacteria. Led by CEO Graham Lumsden, the New York-based company is in discussions with various pharmaceutical companies and universities to build a pipeline of innovative antibiotics targeting Gram positive and Gram negative bacteria. Founded in 2003, Motif intends to build a portfolio of novel antibiotics by licensing drug candidates from organizations specializing in antibacterial research. The company is pursuing several programs in various stages of development.

Lead candidates and project pipeline

Motif’s lead candidate is Iclaprim that is being developed for the treatment of the most common and serious bacterial infections such as acute bacterial skin and skin structure infections (ABSSSI) and hospital-acquired bacterial pneumonia (HABP), including those caused by resistant strains such as methicillin-resistant Staphylococcus aureus (MRSA) and multi-drug resistant Streptococcus pneumoniae (MDRSP), all of which have become prevalent in patients in both the community and hospital settings. Iclaprim is a potential novel antibiotic, designed to be effective against bacteria that have developed resistance to other antibiotics, including trimethoprim. Iclaprim exhibits potent activity against Gram-positive clinical isolates of many genera of staphylococci.

Iclaprim has completed a comprehensive development program, including two successful Phase 3 trials in complicated skin and skin structure infections. Motif is in the process of completing preparations for INSPIRE (Iclaprim for NoSocomial PneumonIa gRam- positive pathogEns) Phase 3 clinical trial with Iclaprim in patients with HABP by the end of 2016. The company is currently enrolling and dosing patients in two global Phase 3 clinical trials (REVIVE-1 and REVIVE-2) with an intravenous formulation of Iclaprim for the treatment of ABSSSI.

Subject to the availability of funding, data readout for REVIVE-1 is expected in the second quarter of 2017 and REVIVE-2 is on track for data readout in the second half of 2017. There are approximately 1.4 million patients hospitalized annually in the US with HABP. On completion of successful clinical trials, the data from these trials would enable the company to submit a New Drug Application (NDA) in the US and a Marketing Authorization Application (MAA) in Europe in H2 FY17.

Market opportunity

Motif believes antibiotics resistance is a major global health threat. So-called “superbugs” are developing resistance to currently available antibiotics at a faster rate than new, effective antibiotics are being developed. Sophisticated interventions like hip replacements, organ transplants, and cancer chemotherapy would become too dangerous to undertake because bacteria continue to develop resistance to currently available antibiotics. Hence, there is an urgent need for new products which are effective against these superbugs. The worldwide antibacterial market was valued at $43.9 billion in 2010.

m3One of the biggest threats is from MRSA, a leading cause of hospital‐acquired infections and a growing cause of infections in healthy people. In 2013, the Centers of Disease Control reported that at least two million people became infected with bacteria that are resistant to antibiotics and at least 23,000 Americans died as a direct result of these infections – more than the annual number of deaths of people diagnosed with AIDS. Given the urgent need to find new antibiotics to address this problem, Motif has a dedicated effort in developing new best‐in‐class antibiotics, each targeting different and unique mechanisms of action to be effective against bacteria that are resistant to most currently available antibiotics.

Dearth for antibiotic R&D

Pfizer Inc. (NYSE: PFE) is one of several pharmaceutical companies to exit from antibiotic R&D in recent years, though it continues to sell older products. The pharmaceutical industry at large has witnessed a drastic fall in antibiotic research due to the low return on investment generated from such molecules. Any new class of antibiotics discovered would need to be used sparingly to conserve their effectiveness, which in turn translates into muted sales. Governments around the world are now looking for ways to encourage large pharma companies to commence R&D in antibiotics to help address a global rise in antimicrobial resistance.m4

Financial highlights

For the six months ended June 30th, 2016, Motif had cash and cash equivalents of about $19.5 million. Net cash used in operating activities amounted to $8.9 million, reflecting the clinical development of Iclaprim. For the six months ended June 30th, 2016, general and administrative expenses increased to $1.9 million from $1.1 million in the year-ago same period. R&D expenses increased to $12.0 million from $0.6 million mainly due to the commencement of Iclaprim clinical development. During the six-month period, Motif also spent $10.1 million for contract research organization expenses, $1.0 million for clinical operations and $0.9 million for other non-clinical development.

IPO details

On November 18th, 2016, Motif announced the pricing of its IPO in the US of approximately 2.44 million American Depositary Shares (ADSs) with 50% warrant coverage. Each ADS, representing 20 ordinary shares of Motif, and warrant to purchase 0.5 ADSs are being offered at $6.98 per ADS and warrant combination. Motif has granted the underwriters a 30-day option to purchase up to an additional 292,618 ADSs and/or 146,309 warrants to cover over-allotments, if any, in the U.S. offering.

Each full ADS warrant will have a per ADS exercise price of $8.03. The ADS warrants are exercisable immediately and have a term of five years. The ADSs and warrants began trading on The NASDAQ Capital Market on November 18th, 2016 under the symbols “MTFB” and “MTFBW,” respectively. H.C. Wainwright & Co. was the sole book-running manager for the U.S. offering.

Motif also conducted a concurrent placement in Europe for 22.9 million ordinary shares with 50% warrant coverage at 28 pence per ordinary share and warrant combination. Motif’s ordinary shares trade on the AIM market of the London Stock Exchange under the ticker symbol “MTFB.” Zeus Capital Limited, Northland Capital Partners and MC Services acted as the placing agents in the European placement.

The US offering closed on November 23rd, 2016, and Motif raised aggregate gross proceeds of approximately $25 million from both its US offering and concurrent European placement. The Company intends to use the net proceeds from these offerings to fund the expenses to be incurred in conducting the two Phase 3 clinical trials of iclaprim for the treatment of ABSSSI, including the completion of its REVIVE-1 trial. Part of the proceeds would also be used for working capital, general and administrative expenses, R&D expenses, and other general corporate purposes.

Be the first to comment

Leave a Reply

Your email address will not be published.


*