Relevare poised for IPO

Improving economic conditions, as well as a more favourable disposition towards biotechnology companies from investors, have led Relevare to reignite its IPO plans, with listing set to occur in March.

Relevare expects to raise at least $20 million, bringing its market cap to $50 million.

The company began testing the market in May 2010 to determine the best time to conduct its float but economic instability and soft investor sentiment from June through to late in the year led management to decide to hold off until conditions stabilised, says CEO Mark Blumling.

But now that economic conditions have improved, Blumling says the time has come for the IPO.

"In terms of macroeconomics, you've started to see greater stability," he told ALS. "Issues that were overhanging in 2010, like sovereign debt, questions around US economic growth and the question of China hyperinflation, and how they would affect the overall market, have now settled down to a significant degree."

Blumling also credits the highly publicised deals done by Mesoblast and Acrux in 2010 with a boost in investor confidence in the biotech sector.

"The combination of biotech showing success and returning cash to their investors has been very beneficial. It's opened up the Australian market investors who were previously dominantly focused in other areas, like resources, and who are starting to see biotech as a viable diversification strategy in their portfolio and one that can generate significant returns."

Relevare began its IPO 'roadshow' last week speaking to potential investors and has so far received a positive reception, said Blumling.

Relevare specialises in treating moderate to severe pain that results from diseases such as cancer, HIV and diabetes. Its flagship treatment, CNSB015, is a combination therapy using an already approved drug, flupirtine, used in combination with opioids.

It intends to use the injection of funds from the IPO to fund a late-stage pivotal trial for CNSB015 in cancer patients in Australia and Europe followed by a 12 month extension study.

The intention is that data from the pivotal trial will be returned in two years. If the IPO goes off as planned, that means data will be returned in the first quarter of 2013.

In addition to the cancer trial, Relevare is also investigating the use of CNSB015 to treat neuropathic pain in HIV patients and is looking to secure a grant to conduct trials in southern Africa.

The long-term plan is to also develop a fixed-dose of flupirtine with a opioid to treat diabetic pain, a potentially multi-billion dollar market.