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Migraine Drug Developer Raises $82.5M in IPO

NASDAQ share price display

(Julien Gong Min, Flickr)

13 Sept. 2019. A developer of a drug for migraine formulated as a dry powder and given as a nasal spray is raising $82.5 million in its initial public offering of common stock. Satsuma Pharmaceuticals Inc. in South San Francisco, California, trading on the Nasdaq exchange as STSA, issued today 5.5 million shares priced at $15.00.

Satsuma’s lead product is a dry powder formulation of a compound now used to treat acute or episodic migraine called dihydroergotamine, or DHE. Migraine is a neurological syndrome causing severe headaches along with nausea, vomiting, and extreme sensitivity to light and sound. In some cases, migraines are preceded by warning episodes called aura including flashes of light, blind spots, or tingling in arms and legs. The web site Migraine.com estimates 37 million people in the U.S. suffer from migraines, and cites World Health Organization data indicating migraines affect 18 percent of American women and 7 percent of men.

DHE is a compound in a class of medications called ergot alkaloids, derived from fungi. The drug works by tightening blood vessels in the brain, and preventing release of substances that cause swelling. DHE formulations are approved to treat migraine as injections given under skin and as a liquid nasal spray.

Satsuma formulates DHE as a dry powder nasal spray, packaged in a plastic squeeze bottle for self-administration, code-named STS101. The company says STS101’s formulation combines DHE with a carrier that quickly adheres to and is absorbed by mucous membranes, allowing for faster uptake.

In July, the company presented results of an early-stage clinical trial, which demonstrated absorption of DHE by participants within 10 minutes. The results also show STS101 is tolerated by users, with sustained levels of DHE in the blood stream and little variation in chemical effects among trial participants. The company is now recruiting 1,140 participants for a late-stage clinical trial testing STS101 against a placebo at 52 locations in the U.S.

Satsuma is a spin-off enterprise from Shin Nippon Biomedical Laboratories, a preclinical and contract research company in Tokyo, formed in January 2017. The company raised $12 million in venture capital at its founding.

After opening at $15.00, Satsuma’s shares rose briefly to nearly $19.00, then fell back near its starting price for most of the day. As of the Nasdaq’s closing bell at 4:00 pm ET, Satsuma shares rallied to $16.90, up 13 percent for the day. For comparison, the overall Nasdaq composite index declined 0.22 percent at its close.

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