Autolus Therapeutics Readies $125 Million U.S. IPO

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Quick Take

Autolus Therapeutics Ltd. (AUTL) intends to raise $125 million in IPO gross proceeds from the sale of ADSs (American Depositary Receipts), per a registration statement.

The company is developing a pipeline of blood cancer and solid tumor T cell treatments with advanced properties.

AUTL is asking a high price for the IPO and the firm will need significant capital to advance its ambitious pipeline to the next milestones and potential stock catalysts.

Company & Technology

London, UK-based Autolus was founded as a spin-out from University College London.

Management is headed by Chairman and CEO Christian Itin, who has been with the firm since October 2014 and was previously Chairman and CEO of Cytos Biotechnology Ltd. He has held numerous senior positions at other biopharma firms.

Institutional investors include Syncona Portfolio (40.6% pre-IPO), Woodford (26.4%) and Arix Bioscience Holdings (9.1%). CEO Itin holds 3.6% of company stock pre-IPO.

Autolus is focused on developing next-generation programmed CAR-T-based treatments for cancer.

Below is a brief video detailing Autolus’ ‘off switch’ for its solid tumor therapy:

(Source: Tech News)

Autolus has in-licensed 25 patent families from University College London out of a total of 61 patent families comprising its intellectual property.

Management believes that it can better tailor therapies to address each specific cancer and overcome cancer’s defense mechanisms for both blood cancers and solid tumors.

Below is the current status of the firm’s development pipeline:

(Source: Autolus F-1/A)

Market And Competition

According to a 2017 market research report by Coherent Market Insights, the global CAR T cell therapy market is expected to reach $3.4 billion by 2028.

The graphic below shows the forecasted growth trajectory of 46.1% over the period 2018 – 2028:

North America is expected to account for the strongest demand due to high rate of blood cancer, with over 171,000 people diagnosed with blood cancer each year.

Europe is expected to be the next biggest market but the Asia Pacific market will grow at the fastest rate, a forecasted CAGR of 62.5% from 2019 to 2028. Japan and China will be primary regions of focus for biopharmas initially targeting the region.

Major competitors that are developing CAR-T treatments for cancers include:

Financial Performance

AUTL’s recent financial results are typical of clinical stage biopharmas in that they feature little in the way of revenue and significant R&D and G&A expenses associated with a large and diverse development pipeline.

Below are the company’s financial results for the past two fiscal years (Audited GAAP):

(Source: Autolus F-1/A)

As of September 30, 2017, the company had $137 million in cash and $6 million in total liabilities. (Audited)

Subsequently, management stated the firm had $120.7 million as of March 31, 2018. (Unaudited, interim)

IPO Details

AUTL intends to sell 7.8 million shares of ADSs representing one underlying ordinary share each at a midpoint price of $16.00 per ADS for gross proceeds of approximately $125 million.

Certain existing shareholders have indicated an interest to purchase ADSs of up to $60.0 million in the aggregate at the IPO price. This represents substantial investor support for the IPO and is a positive signal for public investors.

Assuming a successful IPO at the midpoint of the proposed price range, the company’s post-IPO market capitalization would be approximately $604 million, excluding the effects of underwriter over-allotment options.

Management plans to use the net proceeds from the IPO and cash on hand as follows:

approximately $85.0 million to complete the proof-of-concept phases of our Phase 1/2 clinical trials of AUTO2 in multiple myeloma, AUTO3 in pediatric ALL and DLBCL, and AUTO4 in peripheral T-cell lymphoma, support the clinical trial conducted by UCL for AUTO1 in adult ALL through proof-of-concept, and advance three of these product candidates through later phases of clinical development and, potentially, registration;

approximately $14.0 million to conduct non-clinical development to IND filing of AUTO2 NG, AUTO3 NG and AUTO5, our earlier stage hematological programs, and AUTO6 NG and AUTO7, our product candidates targeting solid tumor indications

approximately $17.0 million to fund our research and development activities to further expand our T cell programming technologies and develop future product candidates and follow-on versions of our more advanced product candidates;

approximately $50.0 million to fund our manufacturing activities to support our ongoing and future clinical trials and potential commercial launch; and

the balance for other general corporate purposes, including general and administrative expenses, development of our commercial infrastructure and working capital.

Management’s presentation of the company roadshow isn’t available.

Listed bookrunners of the IPO are Goldman Sachs, Jefferies, Wells Fargo Securities and William Blair.

Expected IPO Pricing Date: June 21, 2018.

An enhanced version of this article on my Seeking Alpha Marketplace research service IPO Edge includes:

– Valuation

– Commentary

– Opinion on the IPO

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