How did Axovant raise $315M with one asset and no clinical data?
- Vivek Ramaswamy, President and CEO of Avoxant, recently took the company public for $315 million. The company currently has a market cap of almost $3 billion.
- This IPO has gotten attention because while the firm has one major asset—an Alzheimer's disease (AD) drug (RVT-101)—but no clinical data and no patients enrolled in any clinical trials, there is concern that the market valuation is not particularly grounded in reality. Multiple observers in the industry have pointed this out.
- GlaxoSmithKline sold the AD drug to Ramaswamy, a former hedgefund manager, for $5 million.
The size of this offering and the market's willingness to support this deal is indicative not only of prevailing biotech fever, but also excitment about the AD market. However, there has been no clinical trial generated to date, nor are there any subjects recruited for clinical trials, for this drug. But Ramaswamy, who is 29 years old, has integrated this asset into a larger company, Roivant Sciences.
Another concern: AD is a tough nut to crack, with more than 100 failures during clinical development in the last 15 years, including drugs with a foundation of solid pre-clinical data.
Another important data point: Two hedge funds, Visium Asset Management LP and RA Capital Management LLC, purchased 10 million shares of the company during the IPO, which are locked for 90 days (instead of the customary 180 days). Those 10 million shares represent half of the shares for the firm.