Headache combatant CoLucid Pharmaceuticals CLCD is three days from going public Friday, May 1.
The biopharmaceutical company plans to raise $86 million through 5.4 million shares between $13 and $15. CoLucid has a market cap of $210 million and will list on the NASDAQ under the ticker CLCD.
A First-in-Class Drug
Massachusetts-based CoLucid was found in 2005 to focus on developing a proprietary, cutting-edge drug to treat migraines which affect 36 million people in the U.S. (more than diabetes and asthma combined).
Over the past twenty years, the standard treatment has been drugs referred to as triptans. However, these drugs have been associated with adverse side effects such as vasoconstriction which causes rapid heart rate and chest and neck tightness.
As a result, these drugs not suitable for people with cardiovascular risks or diseases. CoLucid’s solution is with its lead drug candidate, Lasmiditan, which comes from the new drug class ditans.
This class triggers a receptor in the brain’s trigeminal nerve. The company hopes to establish its drug as a viable alternative for migraine patients that have cardiovascular problems and those who triptans are ineffective.
Currently in the first part of its phase 3 clinical trial, lasmiditan comes in both an oral pill and an intravenous form to treat patients in the emergency room and urgent care.
Phase 2 of the clinical trials showed that lasmiditan was successful in providing significant headache relief and commonly felt symptoms of nausea and sensitivity to light and sound.
The American Migraine Foundation estimates that 12 percent of the population is affected by migraines in the U.S. and is the leading cause of disability amid neurological disorders. If CoLucid can complete its clinicals and successfully commercialize its drug, then it might be a true game-changer for both patients and investors long-term.
CoLucid’s Financials
Currently, the company has no revenue because the drug is still in clinical trials. CoLucid does not expect to generate any revenue in 2015. Virtually all the company’s money has gone into R&D and general and administrative expenses to prove its drug for the market.
Operating expenses increased by 48 percent from $1.57 million in 2013 to $2.71 million in 2014. Increased expenses are expected as the drug gets closer to commercialization in 2016.
The company has funded its operations primarily from its issuance of preferred stock and notes payable. Since inception, CoLucid has funded its operations with $50.6 million, raised from $41.5 million of preferred stock and $9.1 million of various debt instruments.
CoLucid’s net loss increased from 35 percent from $2.19 million to $2.95 million in 2014. The accumulated deficient stands at $54.5 million.
CoLucid originally licensed lasmiditan from Eli Lilly LLY in 2005 to develop and sell in all major markets including the United States, United Kingdom, Spain, France, Italy, Germany, and Japan.
In the terms of the agreement CoLucid paid Eli Lilly an upfront $1 million fee and issued shares of common stock. If the drug gets approved, Eli Lilly will not only get a $32 million payment but also receive $3 million for any other condition lasmiditan can treat and royalties on any drug sales. The patent will last until 2025.
CoLucid also entered into a supply and distribution agreement with Ildong Pharmaecutical to distribute lasmiditan in the Republic of Korea, Taiwan, Singapore, Malaysia, Indonesia, Thailand, Philippines, Myanmar and Vietnam.
CoLucid received an upfront $1.5 million payment for giving Ildong exclusive rights to develop and commercialize the drug and receive a reduced price in the future.
Conclusion and Pricing Info
Although CoLucid is still in preclinical trials with no revenue or profits, the biopharmaceutical company, already in phase 3, offers a first-mover’s solution to a large market, and has a strategic relationship with Eli Lilly. If the company continues its forward progress into 2016 it should be poised to hit the market strong with the framework already put in motion.
CoLucid expects to net $68 million from its offering and plans to use $56.4 million of the proceeds to complete the clinical trials and development of lasmiditan.
The remainder of the proceeds will be used for working capital, general, administrative and corporate needs.
CoLucid expects to issue 5.4 million shares between $13 and $15 per share and will list under the ticket CLCD on the NASDAQ. Underwriters for the offering include Piper Jaffray, Stifel and William Blair.
Other Offerings:
Wednesday, April 29
- Enviva Partners, LP EVA 10 million shares expect to price at a range of $19 to $21 per share through Barclays, Goldman Sachs and RBC Capital Markets, and Citigroup.
- Viking Therapeutics VKTX 2.5 million shares expect to price at a range of $7 to $9 per share through Laidlaw & Company and Feltl and Company.
Thursday, April 30
- Blueprint Medicines Corp BPMC 7.2 million shares expect to price at a range of $15 to $17 per share through Goldman Sachs, Cowen and Company and JMP Securities.
Friday, May 1
- CoLucid Pharmaceuticals, Inc. CLCD 5.4 million shares expect to price at a range of $13 to $15 per share through Piper Jaffray, Stiffel, William Blair and Ladenburg Thalman.
- Black Stone Minerals L.P. BSM 22.5 million shares expect to price at a range of $19 to $21 per share through Barclays, BofA Merrill Lynch and Citi.
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