Should You Invest in Nabriva Therapeutics IPO?

Nabriva Therapeutics IPONabriva Therapeutics AG (NASDAQ:NBRV), which is about to launch a new antibiotic, is also ready to launch its initial public offering (IPO) on September 18. The stock will be listed on the NASDAQ under the symbol “NBRV.”

It’s a bold move. Should you invest in the Nabriva IPO? This is surely a biotech IPO to watch.

Despite being based in Vienna, Austria, Nabriva has chosen to go directly to the NASDAQ, bypassing its own national stock market. Thanks to Lefamulin, biotech Nabriva Therapeutics has gained a primary position in developing new antibiotics against highly resistant pathogens, leading to nothing less than a new generation of drugs.

From the investment point of view, Nabriva Therapeutics gives investors a rare opportunity to buy into a breakthrough product and company, and a major takeover target, for less than $20.00 a share.

This is not surprising, given the appetite for biotech takeovers and mergers. “The IPO mill keeps on turning out new companies, and then sure enough somewhere down the line you get some other company looking [to buy],” said Asthika Goonewardene, an analyst for Bloomberg Intelligence in New York.

Nabriva filed its IPO with the U.S. Securities and Exchange Commission (SEC) last June with a value estimated at just over $100 million. The proposed price range was set at US$10.50 just hours after this writing (as opposed to between $15.00 and $17.00). It is expected to net proceeds of $83.0 million.

It is rare for new antibiotics to reach the market. Nabriva specializes in the development of intravenous (IV) and oral variants of Lefamulin (BC-3781), its first product candidate. It is based on pleuromutilin, a new type of antibiotic and the first ever to battle serious infections caused by highly resistant bacteria in humans primarily targeting the treatment of community-acquired bacterial pneumonia (CABP).

Nabriva is also studying additional applications for Lefamulin, which should reach pharmacy shelves in 2018. These applications include treatment of skin infections.

The pharmaceutical company Sandoz spun off Nabriva in 2006. The predecessor was founded in 2001 by Sandoz Wiener antibiotic research Antibiotic Research Institute (ABRI). In a first round of financing nine years ago, 42 million euros were collected from several international investors.

Only a few months ago, the Viennese company drew around $120 million (110.6 million euros) from investors to bring its breakthrough Lefamulin candidate into the third phase of clinical testing and to expand its product range. U.S. investors Vivo Capital and Orbimed led the financing round.

Additional funders include EcoR1 Capital, Boxer Capital of Tavistock Life Sciences as well as the already present investors HBM, Phase 4 Partners, Wellcome Trust, GLSV and the Novartis Venture Fund.

According to the company, Pleuromutilines have two major benefits: low potential for cross-resistance with other antibacterial classes, and low potential for bacteria to antibiotics. A year ago, the U.S. Food and Drug Administration (FDA) granted Nabriva “Fast Track” status for Lefamulin to treat infections of the skin and skin structure, CAPB, and acute bacterial skin (ABSSSI) infections resisting the rapid spread of multi-drug resistance.

Pleuromutilines were discovered in 1950 but were only approved in 1979—for veterinary use only! Nabriva’s breakthrough is in finding a way to make it possible for humans to consume these effective antibiotics internally. The first Pleuromutilin approved for humans was Retapamulin in 2007, but it was limited to topical application.

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