Biotechnology startups are under pressure. After years of plentiful funding, few young drug companies are going public, and those that do are struggling to hold onto their value in a market downturn that's forcing biotech executives and their venture backers to adjust.
One notable outlier is Belite Bio, an under-the-radar biotech incorporated in the Cayman Islands and controlled by a Taiwanese drug company. Since Belite raised $36 million via a small initial public offering in April, shares in the company have soared by almost 500% in value — the best performance of any biotech to go public in the U.S. over the past two years that still remains independent.
The share price jump means Belite is now valued at $835 million, more than better-known drugmakers like Agenus and Sangamo Therapeutics and Century Therapeutics. Its market capitalization is almost two-thirds that of Verve Therapeutics, the buzzy gene editing company.
As with most new drug companies, Belite's medicines are experimental and unproven. But it's further along than many newly public biotechs, with an eye disease treatment in late-stage clinical testing — an advantage Belite's CFO Hao-Yuan Chuang said has helped its market debut. By comparison, two-thirds of biotechs that went public over the last two years had drugs either in preclinical or Phase 1 trials.
“We wouldn’t choose to go for an IPO unless we had good clinical trial data," said Chuang.
Belite’s lead drug candidate, dubbed LBS-008, was first studied at Columbia University over a decade ago. An oral medicine, LBS-008 is designed to reduce accumulation of toxic vitamin A byproducts in the eye. Belite thinks it could treat Stargardt disease, a genetic disorder that causes progressive vision loss, as well as the more common dry age-related macular degeneration, or AMD.
The drug was included in a National Institutes of Health program aimed at providing funding for certain medicines, and was put up for bid in 2016. Belite CEO Tom Lin bid on the drug and convinced Columbia he could prove it first in Stargardt disease, and then test it further in dry AMD as well.
At the time Lin was the CEO of Lin BioScience, a Taiwan-listed drugmaker he founded. As the Taiwanese market differs from the U.S., Lin decided to form Belite and incorporate it in the Cayman Islands in 2018. According to Chuang, Belite chose the Cayman Islands because incorporating there gives “more flexibility in terms of adapting listing rule requirements from different stock exchanges.”
Lin BioScience remains Belite’s controlling shareholder through a wholly owned holding company and “was willing to invest in the IPO with the same terms with other investors,” Chuang said.
The IPO was also a way to draw attention to Belite’s pipeline. No treatments currently exist for either Stargardt or the dry form of AMD, and Belite’s medicine is one of a handful being advanced for the conditions.
“If we kept this pipeline only [listed in] Taiwan, first I think the question people will ask is what is the target disease?” Chuang said. “Because [they] probably have not heard about it. But in the Nasdaq market, you have several companies working on that as well.” Chuang says that, due to the competition, investors can better assess the company’s data.
Apellis Pharmaceuticals and Iveric Bio are both developing treatments for geographic atrophy, an advanced form of dry AMD, while Iveric is also testing its lead drug in Stargardt disease. The Food and Drug Administration is currently reviewing Apellis’ treatment for geographic atrophy. Iveric’s prospect is in late-stage trials.
Other biotechs, such as Aequus Pharmaceuticals and reVision Therapeutics, are also working on treatments for Stargardt.
So far, testing has found Belite’s drug to have mild side effects. Data from a Phase 2 trial showed eight of 13 patients gained visual acuity in one eye, two of whom had improvements in their other eye as well. According to Chuang, only Belite has so far been able to show this kind of improvement for Stargardt disease.
Chuang says Belite remains focused on Stargardt and dry AMD to ensure it has enough cash on hand to reach its next milestones.
The company is enrolling a Phase 3 trial for LBS-008 in Stargardt disease and expects to start a second in dry AMD later this year, according to Chuang.
Belite’s shares are currently about $34 each, nearly six times the $6 they were priced at in April.
Editor’s note: This story has been updated to include new information regarding the status of Belite Bio’s clinical trials.