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Dive Brief:
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Biotechnology startup Contineum Therapeutics has outlined plans for an initial public offering to help advance drugs it’s developing for neurological and inflammatory conditions.
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The startup, a successor to a company Roche acquired six years ago, is working on small molecule medicines for multiple sclerosis, idiopathic pulmonary fibrosis and depression. One prospect it wholly owns is in Phase 1 testing, while a second drug partnered with Johnson & Johnson is in a mid-stage trial.
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Contineum is the fourth biotech startup to file for an IPO in March, an uptick that follows a short lull in activity. No biotechs have priced an offering since the middle of February, but IPOs are still on their best pace, in terms of dollars raised, in three years, according to BioPharma Dive data.
Dive Insight:
By seeking an IPO, Contineum is giving founding investor Versant Ventures a chance to cash in for a second time.
The startup traces its roots back to Inception Sciences, an initiative Versant hatched more than a decade ago to help turn academic discoveries into new companies. Since then, Inception has launched 10 biotechs.
Some of those companies have been acquired by larger drugmakers. Among them was a startup known as Inception 5. The company was born from a 2014 collaboration between Versant, Inception Sciences and Roche to unearth drugs that repair the protective coverings of nerve calls that get damaged in diseases like multiple sclerosis. Roche acquired it four years later for a prospect that had emerged from the work.
The team behind Inception 5 wasn’t done, though. Alongside the deal, Versant, some executives and a larger group of academic founders formed a new company to develop more “neuro-regenerative” medicines. That startup, originally known as Pipeline Therapeutics and now Contineum, has since raised about $194 million in private funding, formed a partnership with Johnson & Johnson and now wants to go public.
The drugs Contineum has come up with are being tested against multiple neurological and inflammatory diseases. One prospect blocks a receptor called LPA1R, an emerging target for the lung disease idiopathic pulmonary fibrosis, or IPF. Contineum has a Phase 1 trial underway in IPF as well as the progressive form of multiple sclerosis. Bristol Myers Squibb and Structure Therapeutics are developing similar medicines, but Contineum claims preclinical findings show its drug may be “differentiated” from others.
Another drug, partnered with J&J, inhibits a receptor known as M1R and that’s involved in multiple cognitive processes. Contineum is evaluating it in a Phase 2 study in the relapsed and refractory types of MS and an earlier trial in depression. In its IPO filing, the company claimed its candidate is the most advanced drug of its kind in clinical development. J&J plans to start a Phase 2 trial in depression later this year.
Contineum seeks to become the ninth biotech to go public this year and the first in more than a month. With a drug in mid-stage testing, the company fits the description of the majority of those to price offerings of late. More than half of the IPOs since the start of 2023 — and nine of the last 14 offerings — have involved companies with medicines in Phase 2 or later, BioPharma Dive data show.