Late Stage Biopharma RayzeBio Files For U.S. IPO (RYZB)

A Quick Take On RayzeBio, Inc.

RayzeBio, Inc. (RYZB) has filed to raise $100 million in an IPO of its common stock, according to an SEC S-1 registration statement.

The firm is a clinical-stage biopharma developing radiopharmaceutical treatments for cancer conditions.

RYZB has extensive resources to fund its development programs and is backed by a strong life science investor base.

I’ll provide an update when we learn more about the IPO from management.

RayzeBio Overview

San Diego, California-based RayzeBio, Inc. was founded to develop a pipeline of radiopharmaceutical drugs for the treatment of various solid tumor types.

Management is headed by President and CEO Ken Song, M.D., who has been with the firm since July 2020 and is co-founder and Chairman of Ablaze Pharmaceuticals and was previously co-founder and CEO of Ariosa Diagnostics.

The firm’s lead candidate program, RYZ101, is currently enrolling patients for a Phase 3 trial for the treatment of gastroenteropancreatic neuroendocrine tumors.

The company is also in Phase 1 trials for treating patients with extensive stage small cell lung cancer.

Below is the current status of the company’s drug development pipeline:

RayzeBio has booked fair market value investment of $441.1 million as of June 30, 2023, from investors, including Viking Global Investors, Versant Ventures, venBio, Venrock and PeptiDream.

RayzeBio’s Market & Competition

According to a 2023 market research report by Precedence Research, the global market for solid tumor cancer treatments was an estimated $186 billion in 2022 and is forecast to reach $532 billion by 2032.

This represents a forecast CAGR (Compound Annual Growth Rate) of 11.09% from 2023 to 2032.

The main drivers for this expected growth are improvements in treatment options, coupled with government emphasis on creating greater availability amid higher demand from patients worldwide.

Also, the chart below shows the historical and projected future growth rate of the solid tumor treatment market from 2023 to 2032:

Major competitive vendors that provide or are developing related treatments include the following companies:

• Bayer

• Novartis

• Johnson & Johnson

• Abdera Therapeutics

• Actinium Pharmaceuticals

• Aktis Oncology

• Convergent Therapeutics

• Debiopharm

• Fusion Pharmaceuticals

• ITM Isotope Technologies, Munich SE

• Lantheus Holdings

• Mariana Oncology

• Perspective Therapeutics

• POINT Biopharma Global

• RadioMedix

• Telix Pharmaceuticals Limited

• Y-mAbs Therapeutics

RayzeBio, Inc. Financial Status

The firm’s recent financial results are typical of a clinical-stage biopharma in that they feature no revenue and material R&D and G&A expenses associated with its pipeline.

Below are the company’s financial results for the past two and one-half years:

As of June 30, 2023, the company had $257 million in cash, equivalents and short-term investments and $26 million in total liabilities.

RayzeBio, Inc. IPO Details

RayzeBio intends to raise $100 million in gross proceeds from an IPO of its common stock, although the final figure may differ.

No existing shareholders have indicated an interest in purchasing shares at the IPO price, although this element may become a feature of the IPO if disclosed in a future filing.

Management says the firm qualifies as an ‘emerging growth company’ as defined by the 2012 JOBS Act and may elect to take advantage of reduced public company reporting requirements; prospective shareholders would receive less information for the IPO and, in the future, as a publicly-held company within the requirements of the Act.

Management says it will use the net proceeds from the IPO as follows:

to advance the clinical development of RYZ101 through topline data in Phase 3 trial in GEP-NETs; […] to advance clinical development of RYZ101 through Phase 1b efficacy data in ES-SCLC;

for IND enabling activities and clinical development of RYZ801 and RYZ811 in HCC through Phase 1b safety data;

to complete construction of our GMP manufacturing facility in Indianapolis, Indiana; and

the remainder for working capital, additional research and clinical development, and other general corporate purposes, including the additional costs associated with being a public company.

We believe that the net proceeds from this offering and our existing cash, cash equivalents and short-term investments, together with interest thereon, will be sufficient to fund our operations through at least 2025, although there can be no assurance in that regard.

Management’s presentation of the company roadshow is not available.

Regarding outstanding legal proceedings, management said the firm is not currently a party to any material legal proceedings.

Listed bookrunners of the IPO are J.P. Morgan, Jefferies, Evercore ISI and Truist Securities.

Commentary About RayzeBio’s IPO

RYZB is seeking public capital market investment to fund further development of its pipeline of radiopharmaceutical treatment candidates for cancer.

The firm’s lead candidate program, RYZ101, is currently enrolling patients for a Phase 3 trial for the treatment of gastroenteropancreatic neuroendocrine tumors.

The company is also in Phase 1 trials for treating patients with extensive stage small cell lung cancer, and other candidates are in development.

The market opportunity for treating solid tumors is extremely large, but the firm faces substantial competition.

The pancreatic cancer treatment area has proven very challenging to develop, and such cancer types have proven highly lethal to patients.

Management hasn’t disclosed any major pharma firm collaboration, but its investor syndicate includes a number of well-known life science venture capital firms.

J.P. Morgan is the lead underwriter, and the seven IPOs led by the firm over the last 12-month period have generated an average return of 21.8% since their IPO. This is an upper-tier performance for all major underwriters during the period.

RYZB appears to be very well capitalized to fund its development activities and has the backing of a strong syndicate of investors.

When we learn more about the IPO from management, I’ll provide a final opinion.

Expected IPO Pricing Date: To be announced.