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Drug Delivery Biotech Raises $101.8 Million in IPO

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(A. Kotok)

17 July 2015. Chiasma Inc., a biotechnology enterprise developing oral therapies to replace injected drugs, raised some $101.8 million in its initial public stock offering. The company — located in Newton, Massachusetts and Jerusalem, Israel — issued 6,365,000 shares at $16.00, and trades on the Nasdaq exchange under the symbol CHMA. Shares in the company closed today (17 July) at $20.00, after rising to $22.60 immediately after issuance the day before.

Chiasma develops therapies in pill or capsule form which were previously available only as injections. The company’s technology, known as transient permeability enhancer, creates a protective medium for therapeutic peptides or small molecule proteins in the form of of solid water-seeking particles suspended in an oily water-phobic medium. With the transient permeability enhancer, says Chiasma, therapy payloads can withstand the rigors of the human gastrointestinal system, yet be delivered to the blood stream intact, in their native active form.

The company’s lead product is a capsule formulation of the drug octreotide to treat acromegaly, a disorder that results from too much growth hormone, made by the pituitary, a small gland in the brain. The disease is most often diagnosed in middle-aged adults, although symptoms, usually abnormal growth of the hands and feet, can appear at any age. If left untreated, acromegaly can result in serious illness — type 2 diabetes, high blood pressure, and arthritis — and premature death.

Octreotide is a peptide drug to control acromegaly symptoms and is given as an injection in the buttocks. Immediate acting octreotide is administered 4 times a day, while an extended release form of the drug is given once every 4 weeks. Chiasma says its octreotide capsules work like the natural hormone somatostatin by binding to receptors in the pituitary gland that regulate production of growth hormone.

The company says it completed a late-stage clinical trial of octreotide capsules with people having acromegaly, and submitted last month an application for review by FDA. Chiasma is conducting a similar trial in Europe in preparation for regulatory review there. The company plans to test octreotide capsules with related neuroendocrine tumors, and extend the transient permeability enhancer technology to other disorders where patients require frequent injections.

In February 2013, Chiasma licensed its octreotide capsule technology to the pharmaceutical company Roche, which provided an upfront payment of $65 million and made Chiasma eligible for milestone payments worth another $530 million. The deal calls for Roche to commercialize octreotide capsules after completion of clinical trials and regulatory submissions.

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Hat tip: Fortune/Term Sheet

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