Biotech builds IPO case on cancer drug delivery platform

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Audeo Oncology has filed papers to raise as much as $60 million in an initial public offering, touting its pipeline of anti-cancer treatments that use a hyaluronic acid-based delivery platform to improve attacks on tumors. Formed with cancer drug assets from the Australian biotech Alchemia, Audeo aims to list its stock in the U.S. and Australia.

Audeo's Hyaluronic Acid Chemotransport Technology, or HyACT platform, traps chemotherapy drugs in hyaluronic acid and delivers higher amounts of drugs to tumor cells than chemo alone without increasing toxicity, the company says in its SEC filing for the proposed IPO. Targeted to CD44 receptors on cancer cells, the HyACT drugs are designed to slip into leaky tumor vasculature and unleash high amounts of chemo into tumor cells. And the CD44 targeting could come in handy to take out pesky cancer stem cells that tend to resist standard chemo.

A drug delivery story alone might be a tough sell for any biotech IPO, but Audeo's pitch comes packaged with a late-stage drug in the pipeline. The company has begun a pivotal trial of its lead HyACT candidate, HA-irinotecan, for metastatic colorectal cancer, and the same drug is also in mid-stage development for small cell lung cancer. Its strategy is to take approved cancer drugs like the chemotherapy irinotecan and combine them with the HA platform, potentially reducing the risks of the programs. Yet plenty of biotechs promise similar benefits with their delivery platforms, and Audeo will have to distinguish itself to win over finicky backers of biotech IPOs.

According to an article in The Australian, Alchemia's leadership opted for the demerger of the oncology business in part to access the U.S. market and physicians in the country. "If we're going to split them up, we might as well go the whole hog and list on Nasdaq at the same time as listing in Australia to give us access to a greater pool of capital for use in the future, and also to establish a footprint for the company in the U.S., which is going to be the biggest market for our product," Alchemia CEO Peter Smith told the newspaper.

- here's the IPO filing with the SEC
- see The Australian's article

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