Montreal drug developer Clementia Pharmaceuticals Inc. has filed to go public in the United States to fund development of what it hopes will be the world's first treatment for a debilitating condition that turns human muscles, tendons and ligaments into bone.
The seven-year-old company, which previously raised $103-million (U.S.) in early-stage financing from seasoned biotech investors including OrbiMed Advisors, BDC Capital, New Enterprise Associates and Janus Henderson Global Life Sciences Fund, has filed to raise up to $115-million in its initial public offering (IPO) on the Nasdaq Stock Market, which is being led by Morgan Stanley and Leerink Partners. A company spokesman declined to comment.
It's the latest positive development for Canada's biotech industry, which has been on an upswing marked by huge early-stage financings for developers and this spring's IPO of Vancouver-based cancer therapy developer Zymeworks Inc. on the Toronto and New York stock exchanges, by far the largest Canadian biotech IPO on a Canadian exchange in a decade.
Clementia is looking to commercialize a molecule licensed from Swiss drug giant Roche Holding AG called palovarotene, which early tests have shown prevents "abnormal new bone formation" through a genetic condition known as fibrodysplasia ossificans progressiva (FOP).
The condition, which is first detected in babies born with distinctively shortened, inward-pointing big toes, results in recurring soft-tissue flareups that leave behind abnormal bone formations. Most of the world's estimated 9,000 FOP sufferers are confined to wheelchairs by their 20s, sustaining locked jaws, constricted rib cages, constricted breathing and/or severely deformed spines. They live to a median age of 40, often dying from complications such as pneumonia and heart failure.
Clementia says in regulatory filings that palovarotene in early clinical trials has shown "potent activity" in preventing the impacts of FOP. The company is starting advanced late-stage Phase 3 trials this year with 100 patients and hopes to have results by 2020. It has been approved by drug regulators in the U.S. and Europe to expedite development thanks to its status as an orphan drug. Once the drug is approved, Clementia will have seven years of market exclusivity in the U.S. and 10 years in Europe.
Drug companies have increasingly looked to develop personalized medicines targeting smaller populations suffering from rare diseases thanks to advances in cell-based therapies and genomics. The pharma giants are increasingly looking to partner with startups, offloading much of the considerable cost and risk of developing and testing drugs to outside entities that need hundreds of millions of dollars to bring them to market from risk-taking venture capitalists (VCs) and public market investors.
Canada has benefited from that trend, with several VC firms from Canada and the U.S. creating or revitalizing existing pharma developers with massive financings needed to fund trials and regulatory approval processes. That has helped cushion the blow from earlier this decade when several global drug giants downsized their Canadian research laboratories.
Clementia is looking beyond the niche of FOP, stating it hopes to develop palovarotene as a treatment for more common ailments, including another genetic disease that causes bone tumours in children, affecting an estimated 150,000 people worldwide, as well as the far more common dry eye disease.
The company is led by veteran Montreal biotech entrepreneur Clarissa Desjardins, 50, who is married to Lloyd Segal, another biotech veteran who heads newly formed cancer drug developer Repare Therapeutics, which announced last week that it had raised $68-million in venture financing.