The Axcella Health IPO: What You Need To Know

The Street can't get enough biotechs. Here's the latest firm to join the company of hundreds.

The IPO

Axcella Health Inc. will issue more than 3.57 million shares on the Nasdaq under ticker AXLA, according to the firm’s S-1 filing. Priced between $20 and $22, the offering represents 15.5 percent of outstanding shares and is expected to bring in about $90.4 million.

Underwriters include Goldman Sachs, JPMorgan and SVB Leerink.

The company qualifies as an emerging growth company under the U.S. JOBS Act, which exempts management from certain SEC disclosure requirements.

The Company

The 11-year-old biotech company develops therapies for dysregulated metabolism.

In 2018, three of its six candidates generated positive results in non-IND clinical studies for hepatic insufficiency and non-alcoholic fatty liver disease (NAFLD). Axcella intends to launch a Phase 2b/3 clinical trial in the back half of 2020 for its lead candidate, AXA1665, in hepatic encephalopathy.

The lab has three other candidates in pre-clinical or non-IND studies targeting pediatric NAFLD, sickle-cell disease and limb immobilization-induced acute atrophy.

The Finances

In 2018, management recorded $36.07 million in net loss against the previous year’s rate of $30.94 million. Axcella has not yet generated revenue.

By the end of last year, it had accumulated $26 million in debt and received $197.8 million in stock sales to fund operations.

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