IPO in the genes? Investors eye ProNAi after successful trial

IPO in the genes - ProNAiProNAi Therapeutics Inc. has been watched by investors this year as the company, coming off a successful trial for its cancer-fighting drug, looks at a possible IPO.

The Plymouth Township-based company raised $12.5 million in a round that closed in December and was led by Capital Midwest Funding in Milwaukee and joined by Apjohn Ventures of Kalamazoo.

The company previously raised $20 million in several rounds starting from its founding in 2004. Michigan-based angel investors have provided the bulk of financing.

ProNAi’s name is a reference to the term DNAi, or DNA interference, the use of DNA to interfere with disease-causing genes. ProNAi’s technology is based on the work of Reza Sheikhnejad, a scientist who worked at Wayne State University and the Karmanos Cancer Institute and remains a shareholder in the company.

ProNAi’s drugs contain DNA fragments that target disease-causing genes and deactivate them. Its main product is an anti-cancer drug called, for now, PNT2258. A human trial of the drug last year on 12 non-Hodgkin lymphoma patients led to complete remission in three patients, partial remission in one patient, and tumor shrinkage in another six patients.

The company’s platform for making this drug can be extended to target any other disease where turning off a gene would be helpful for patients, said Mina Sooch, president of ProNAi and general partner at Apjohn. The company is working on a drug to fight hepatitis B, for example, since switching off the virus’ DNA would render it inert.

ProNAi has more than 30 genetic targets in its sights, half of them cancer-related, and the other half a mix of cardiovascular, infectious and inflammatory diseases.

Phase-two studies of ProNAi’s anti-cancer drug are ongoing at three sites. The goal is to win regulatory approval, either from European or American regulators, in three or four years.

ProNAi is working on a new round with a target of $30 million to pay for more studies and hiring.

The company also is considering an IPO, should market conditions become attractive enough to go for it, Sooch said. The company is considering the second half of this year as the timeframe for this possible IPO.

Barring that, ProNAi also is looking to find a major pharmaceutical company that would help further develop and manufacture ProNAi’s drugs in exchange for rights to sell them on a royalty basis.

ProNAi is not seeking exit by acquisition, however.

Sooch said most acquirers would be seeking to absorb one product, such as ProNAi’s anti-cancer drug, and call it a day. The company’s platform for producing drugs has too much potential for that, she said.

“We don’t want to be sold and just to be done with it,” Sooch said.

March 9, 2014 | Crain’s Detroit Business – New Michigan Deal Supplement

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