Satsuma Pharma IPO: What You Need To Know

A biotech company developing a migraine treatment is testing the IPO waters this week.

The IPO Terms

South San Francisco-based Satsuma Pharmaceuticals, Inc. has filed for an IPO of 5 million shares of its common stock.

At the midpoint of the estimated price range of $14-$15, the size of the offering is about $72.5 million.

Satsuma has applied to list its shares on the Nasdaq under the ticker symbol "STSA."

The company said in the filing that some of its existing investors affiliated with some of its directors have expressed interest in buying about $25 million in shares.

Credit Suisse, SVB Leerink and Evercore are the underwriters for the offering.

The Company

Founded in June 2016, Satsuma is a clinical-stage biopharma company developing a novel therapeutic product for the acute treatment of migraines.

Its product candidate STS101 is a drug-device combination of a proprietary dry powder formulation of dihydroergotamine mesylate, or DHE, for quick and easy administration using a pre-filled, single-use, nasal delivery device.

Although DHE products have already been used for the acute treatment of migraines, widespread usage is constrained by invasive and burdensome administration and/or suboptimal clinical performance of available injectable and liquid nasal spray products.

A Phase 1 study of STS101 has been completed, with data from the trial showing rapid and sustained DHE plasma concentrations, low pharmacokinetic variability and a favorable safety and tolerability profile.

Recently, the company initiated a Phase 3 study dubbed EMERGE. Top-line data from the trial is expected in the second half of 2020.

"It has been estimated that migraine results in up to $36 billion in healthcare and lost productivity costs and up to 157 million lost workdays annually in the United States," Satsuma said in the filing, highlighting the market opportunity for its pipeline asset.

The Finances

Satsuma has yet to post revenue. The company reported a loss of $7.35 million for 2018 compared to a loss of $5.17 million in 2017. For the six moths ended June 30, the company's loss ballooned from $3.42 million to $9.11 million.

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