Regado gambles on $75M IPO to pay pricey PhIII tab

John Carroll

Late last year Biosciences came up with a big $ 51 million round that served as a kind of down payment on a planned $ 120 million study of its lead therapy–an anticoagulant that adds a promising "real-time" therapeutic tool to dial the effect up and down in order to control bleeding risks. Not willing to take any offers on the table, though, still had to come up with the rest of the money. And now it's sprung a $ 75 million IPO designed to take it all the way through Phase III.

The Basking Ridge, NJ-based biotech is working to do something rarely seen in drug development. The company wants to pull off a huge late-stage trial involving 13,200 subjects that can definitively prove that REG1 is not only a state-of-the-art anticoagulant, but that it's a far safer alternative to what's available now. And by adding an on-off switch, physicians should be able to use the maximum dose for each patient.

That's not cheap. The biotech has already burned through $ 110 million to get to this stage. Last year's financial audit included a "going concern" warning. And while a successful IPO would give it the cash it needs to get through 2014, there are significant risks associated with both the trial as well as mounting an IPO in a market that still exhibits plenty of skepticism for drug developers with nothing but red ink to show for their work.

The upside for success, though, is substantial. Domain Associates, Quaker Partners, Aurora Funds, Edmond de Rothschild Investment Partners and Caxton Advantage Life Sciences Fund and more recently Rusnano have all been willing to dig deep in the belief that Regado could come up with a new standard of care for a major market. Former Fastenal CEO Robert Kierlin owned about 26% of the company before the last round.

Cowen & Company and BMO Capital Markets will act as joint book-running managers for the offering.  Canaccord Genuity, Needham & Company and Wedbush PacGrow Life Sciences will act as co-managers.

– here's an item from Nasdaq.com
– here's the S-1

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