Principia Biopharma, a UCSF Spinout, Seeks $86 Million IPO - Bay Area's 11th Life Sciences IPO This Year

A South San Francisco company — one of a handful trying to block an enzyme implicated in a number of diseases — filed to raise $86.2 million in an initial public offering.

Principia Biopharma Inc.'s placeholder IPO would represent the 11th time a Bay Area life sciences company goes public this year, the most in a single year since 13 went public in 2015.

Principia, whose stock would trade on the NASDAQ exchange as "PRNB," was built around trying to find a way to inhibit Bruton's tyrosine kinase, or BTK, an enzyme that is critical in the development of antibody-producing B cells and other cells that clear away cellular garbage. But BTK can produce too many of those cells, leading to inflammation and related diseases, such as multiple sclerosis and, now at the top of Principia's list, a rare, chronic skin condition known as pemphigus.

Led by CEO Martin Babler, Principia said it wants to use its IPO cash mainly to fund an ongoing mid-stage clinical trial of its drug, PRN-1008, for pemphigus and to take the drug into a third and final phase of studies in people. The money also would fund development of the same drug as a treatment for immune thrombocytopenic purpura, or ITP, a condition in which levels of blood-clotting platelets drop to unsafe levels.

The ITP program is in Phase II clinical trials as well and, Principia said in its IPO filing Friday with the Securities and Exchange Commission, PRN-1008 could be used in a wide array of autoimmune and inflammatory diseases.

Principia also wants some of the IPO money to help fund its obligations under an agreement with Sanofi S.A. (NYSE: SNY) around another BTK inhibitor known as PRN-2246. It is designed to reduce the number of B cells in the brain that are believed to play a role in the development of multiple sclerosis and other central nervous system conditions.

Principia and Sanofi in November signed a deal that ultimately could net Principia more than $800 million, if certain development milestones are hit.

Ten-year-old Principia, which had an accumulated deficit of $150.5 million at the end of last year, also plans to use the IPO to complete a Phase I study of another drug, PRN-1371, to block fibroblast growth factor receptor, or FGFR, to treat solid tumors, particularly bladder cancer.

The 47-employee company, founded by serial biotech entrepreneur and venture capitalist Bernard Cambou and University of California, San Francisco, professor Jack Taunton, has raised $135 million in venture capital and partner payments. Its largest shareholders are Morgenthaler Venture Partners, New Leaf Ventures, SR One and OrbiMed (16.8 percent each) and Sofinnova Venture Partners and entities connected with Baker Bros. Advisors LP (12.3 percent each).