Third Harmonic’s $183M stock market debut stands out in a sea of stalled IPOs

by Bailey Amber
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Third Harmonic Bio is joining the public markets with a $183.3 million IPO that’s a stark outlier in the context of the near absence of new stock offerings in 2022. Record inflation, rising interest rates, and recessionary fears have chilled public financing activity in the year to date.

Not only has Third Harmonic pulled off a stock sale, but it was also able to boost the deal size. Wednesday evening, the biotech offered 10.9 million shares priced at $17 each, which was the midpoint of its targeted price range. When the company set financial terms for the IPO last week, it aimed to sell 9 million shares. Third Harmonic shares are slated to begin trading Thursday on the Nasdaq under the stock symbol “THRD.”

Cambridge, Massachusetts-based Third Harmonic is an inflammation and allergy biotech whose main asset, licensed from Novartis, has potential applications in several conditions. The small molecule, THB001, is designed to block KIT, a receptor that regulates mast cells, a type of immune cell. Mast cells play a role in many inflammatory conditions and blocking it has shown efficacy in some disorders, such as asthma. With the ability to selectively block KIT compared to other small molecule drugs, THB001 could avoid off target effects, the company said in its IPO filing.

So far, Third Harmonic has generated encouraging early Phase 1 data for its small molecule. Its lead disease target is chronic urticaria, an inflammatory skin disorder that leads to hives. Third Harmonic’s effort to block KIT trails a drug from Celldex Therapeutics. The Celldex drug, barzolvolimab, is in early clinical development for urticaria and other inflammatory disorders. But as an antibody, the Celldex drug is given as an intravenous infusion. The formulation of Third Harmonic’s drug as a more convenient oral pill should give it a dosing edge.

With the IPO cash, Third Harmonic plans to press ahead with multiple clinical trials testing its drug candidate. Between $80 and $90 million is earmarked for continuing clinical development of THB001 in urticaria by completing a Phase 1b study and starting a Phase 2 study, according to the IPO filing. The company expects to report initial data from the Phase 1b study in the first half of 2023. Applications to begin the Phase 2 tests in the U.S. and Europe are expected in the first half of 2024.

Another $30 million to $40 million of the IPO cash is planned for clinical development of the drug in other indications, including the completion of a Phase 1b test in asthma. Preliminary data from the asthma study are expected in the second half of 2024, according to the filing.

As of the end of the second quarter of this year, Third Harmonic reported having $112.7 million in cash and cash equivalents. The biotech projects that its cash reserves plus the funds from the IPO will support operations through 2025.

Here’s a look at some other stock market news this week for biotech companies:

No IPO for Elicio

Cancer immunotherapy developer Elicio Therapeutics is withdrawing its planned IPO. The Boston-based biotech had initially filed to go public in 2021, when financial conditions were more friendly for stock offerings. In a Sept. 13 letter to the Securities and Exchange Commission, Elicio offered no reason for the withdrawal other than to say it does not plan to pursue the stock offering at this time.

Elicio left the door open for a future IPO, asking the commission to credit the fees paid so far toward future use. The company’s lead drug candidate, ELI-002, is in Phase 1/2 testing as a potential treatment for cancers characterized by the KRAS mutation.

Know Labs’ stock finds a new home

Shares of medical diagnostics technology company Know Labs, which previously traded over the counter, have been uplisted to the NYSE American Exchange. Those shares are set to begin trading on Friday under a new stock symbol: “KNW.”

Seattle-based Know Labs says its technology directs electromagnetic energy through a substance or material to capture a unique molecular signature. The company is using this “Bio-RFID” technology to develop a non-invasive glucose monitor that provides users real-time information about their blood glucose.

Photo: Spencer Platt, Getty Images

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