Prime Medicine becomes the next high-profile biotech to test the IPO waters

Dive Brief:

• Gene editing startup Prime Medicine has become one of the first high-profile biotechnology companies to file for an initial public offering in several months.
• The startup, formed around technology developed by Beam Therapeutics and Editas Medicine co-founder David Liu, outlined its offering in a Friday filing with the Securities and Exchange Commission. IPO research firm Renaissance Capital estimated the offering could be worth up to $200 million, which would be one of the sector’s largest in 2022 and the biggest for a “preclinical” biotech in a year, according to BioPharma Dive data.
• The filing revealed new details about a company that publicly launched last July with $315 million in funding. Prime says it has 18 programs in development across a variety of disease areas, for instance, a complex relationship with Beam, and a staff that had grown to more than 135 people at the end of June. Liu is by far Prime’s largest shareholder, owning about a quarter of its stock.

Dive Insight:

Prime’s filing represents a key test for biotech initial public offerings, which are showing some early signs of life after a prolonged slowdown.

Twelve days ago, autoimmune drug developer Third Harmonic Bio provided the sector with a lift. By raising $185 million in a new stock offering, Third Harmonic priced biotech’s biggest IPO in four months and one of the largest of 2022. Before that offering, the majority of companies that went public this year raised less than $40 million. The last two to raise more than $100 million — neuromuscular disease drug developer PepGen and Bausch & Lomb, the eye medicine business of Bausch Health — priced offerings on May 6.

Prime now aims to follow in Third Harmonic’s footsteps, albeit with a different pitch. Third Harmonic is a “product”-focused biotech, revolving more narrowly around a specific drug already in clinical testing, the type of company investors interviewed by BioPharma Dive this year suggested are gaining more interest during the sector’s recent downturn.

Prime, by contrast, is a “platform” biotech built around a technology meant to support several medicines, and hasn’t yet started its first clinical trial. The company didn’t say in its IPO filing how far away it is from human testing. In 2021, CEO Keith Gottesdiener estimated a Phase 1 trial was at least two years away.

That profile makes Prime similar to the majority of those that went public during the sector’s back-to-back record-breaking years of 2020 and 2021. During that time, nearly two-thirds of the biotechs that went public were in preclinical or Phase 1 testing at the time of their IPO. Several of the companies to receive the biggest IPO valuations, like Lyell Immunopharma, Sana Biotechnology and Caribou Biosciences, were platform biotechs developing gene- or cell-based medicines. Lyell, Sana and Caribou each trade well below their debut prices.

Prime is advancing a type of technology known as “prime editing,” which is meant to be more precise than the CRISPR-based technologies that have gained notoriety over the last decade. The technology uses some of the same building blocks as CRISPR gene editing, but is capable of swapping out specific DNA letters and editing out specific sequences of nucleotides. Gottesdiener said last year that prime editing could address more than 90% of known disease-causing mutations, and has shown potential in a variety of different cell types.

Prime is starting with a popular gene editing target, the chronic blood disorder sickle cell, but its pipeline also lists programs for genetic forms of blindness, hearing loss, as well as liver, muscle and lung diseases. The company is using both outside-the-body delivery approaches for some prospects and more convenient techniques for others. It’s also using multiple different tools — from modified viruses and fatty spheres known as lipid nanoparticles to non-viral methods — to send genetic material into the body.

The biotech has close ties with Beam via a partnership that’s been in place since late 2019. The companies share some research and intellectual property, and Beam will have rights to certain programs being developed by Prime, with the startup getting downstream payments and royalties, according to the IPO filing.

GV, the venture arm of Alphabet, is Prime’s largest institutional investor, with a roughly 15% stake. Arch Venture Partners and F-Prime Capital Partners each hold about 14% of Prime, while Newpath Partners owns about 6%.

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