Quick Take

Olema Pharmaceuticals (OLMA) has filed to raise $100 million in an IPO of its common stock, according to an S-1 registration statement.

The company is a clinical stage biopharma seeking treatments for women’s cancers.

OLMA is advancing its OP-1250 drug across several fronts, both as a monotherapy and in combination with others. Novartis is a major pharma researching OP-1250 with its ribociclib drug.

I’ll provide a final update when we learn more about the IPO from management.

Company & Technology

San Francisco, California-based Olema was founded to development treatments for various forms of breast cancer.

Management is headed by president and CEO Sean Bohen, M.D., Ph.D., who has been with the firm since 2020 and was previously EVP Global Medicines at AstraZeneca (AZN).

Below is a brief overview video of ER+ breast cancer:

Source: Dana Farber

The firm’s lead candidate is OP-1250, which it is employing in several different programs for various breast cancer subtypes.

The drug is in Phase 1 trials for the treatment of ER+, HER2- metastatic breast cancer and in preclinical studies for other indications.

Below is the current status of the company’s drug development pipeline:

Source: Company S-1 Filing

Investors in the firm have invested at least $148.3 million and include BVF Partners, Cormorant Asset Management, Janus Capital Management, Logos Opportunities Fund, RA Capital Management and Wellington Biomedical.

Market & Competition

According to a 2019 market research report by Zion Market Research, the global breast cancer drugs market was an estimated $18.8 billion in 2018 and is forecast to reach $38.3 billion by 2025.

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This represents a forecast CAGR (Compound Annual Growth Rate) of 10.55% from 2019 to 2025.

Key elements driving this expected growth are an increasing prevalence of breast cancer worldwide, growing investment by firms in research & development and increased spending by governments and healthcare payers.

Also, patent expirations for existing drugs will fuel expansion of access to treatment options.

Major competitive vendors that provide or are developing related treatments include:

Financial Status

Olema’s recent financial results are typical of a clinical stage biopharma in that they indicate no revenue and significant R&D and G&A expenses associated with its development efforts.

Below are the company’s financial results for the past two and ¾ years (Audited PCAOB for full years):

Source: Company registration statement

As of June 30, 2020, the company had $127.8 million in cash and $5.3 million in total liabilities. (Unaudited, interim)

IPO Details

Olema intends to raise $100 million in gross proceeds from an IPO of its common stock, although the final figure will likely differ.

No existing shareholders have indicated an interest to purchase shares at the IPO price, although this element may become a feature of the IPO if disclosed in a future filing.

Management says it will use the net proceeds from the IPO as follows:

to complete our ongoing Phase 1/2 monotherapy clinical trial;

to advance OP-1250 through our planned Phase 1b combination trials with CDK4/6i and PI3Kα; and

the remainder for other ongoing research and development activities, and for general corporate purposes, including working capital, operating expenses and capital expenditures.

The firm believes its resources, including the IPO proceeds, will fund its operations for at least 24 months.

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Management’s presentation of the company roadshow is not available.

Listed bookrunners of the IPO are J.P. Morgan, Jefferies, Cowen, and Canaccord Genuity.

Commentary

Olema is seeking IPO funding to advance its OP-1250 drug candidate through Phase 1b trials.

Management expects to have data to publish from that trial in the second half of 2021, assuming no delays from Covid-19 or other sources.

The market opportunity for breast cancer drugs as a group is quite large and expected to grow at a substantial rate of growth over the coming years, as prevalence increases and the global population of women ages.

OLMA has entered into a collaboration agreement with Novartis (NVS), with NVS being responsible for ‘funding the majority of the costs for the Phase 1b clinical trial [OP-1250 in combination with ribociclib], as well as supplying their drugs.’

The company’s investor syndicate includes well-known private equity firms but no front-line venture capital life science investors.

When we learn more about the IPO from management, including pricing and valuation assumptions, I’ll provide a final opinion.

Expected IPO Pricing Date: To be announced.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.

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