For the first time since last summer, a biotech has uplisted from an over-the-counter stock exchange to the Nasdaq. Such a move has become a rarity in recent years, mirroring the difficulty that drug developers have had in going through initial public offerings.
But behind the industry’s first uplisting of 2024, from San Diego biotech Skye Bioscience, is investors’ interest in an area of drug R&D that every therapeutics developer wants in on right now: the next wave of obesity medications.
Skye is developing a CB1 receptor inhibitor, a similar type of obesity drug as the one Novo Nordisk got in its up to $1.075 billion acquisition of Inversago Pharma last August.
As Novo’s Wegovy and Eli Lilly’s Zepbound surge in demand, drugmakers are looking at making different types of obesity medications than GLP-1s, which have run into toxicity issues, problems with muscle loss and manufacturing bottlenecks.
Skye made the stock move on Thursday after raising slightly more than $100 million — across three private placements from 21 different investors — since last August. The third one, inked last month, came in at a 450% premium, Skye CEO Punit Dhillon said in a phone interview with Endpoints News on Thursday.
Andy SchwabWhile PIPEs broached record levels in the first quarter of 2024, it’s still rare for an over-the-counter biotech to complete three such capital raises. But thanks to “progress in the field” and the backing of specialist healthcare investors, Skye was placed on “peoples’ radars” and able to forge the private placements, said Andy Schwab, Skye board director and founder of 5AM Ventures, in an interview.
The uplisting took a little longer than expected.
“We ended up going through a fairly lengthy review with an analyst. Unfortunately, in Q4, that [Nasdaq] analyst ended up leaving,” Dhillon said. “It opened the opportunity for us to finish our efforts on completing our equity raise, and then we got assigned a new analyst. We then basically refreshed the application with all of the new numbers.”
The company will now have an even broader access to the capital markets as a Nasdaq-listed company. In its first day of trading, the share price of $SKYE closed down 6% at a market cap of $356 million.
Prior to Skye, the most recent biopharma uplistings occurred in the second quarter of 2023. Substance use disorder biotech Indivior and inflammatory and immunology biotech CalciMedica were the only biopharmas to make such a move last year, according to data provided by the Nasdaq. Other startups have announced aspirations to uplist but have yet to do so. Meanwhile, some have been delisted in recent years because of the depressed financing environment for many biotechs.
“Nasdaq is thrilled to welcome companies to market through a number of different listing avenues, including uplisting, and could see more companies choose this path in the second half of the year,” said Jordan Saxe, head of healthcare markets at the exchange, in an email to Endpoints.
An approach from the aughts
Skye is developing SBI-100, a CB1 receptor agonist that will have Phase 2 results in glaucoma this quarter, and nimacimab, a CB1 receptor inhibitor for obesity and chronic kidney disease.
Skye acquired nimacimab from Versant Ventures- and 5AM Ventures-backed Bird Rock Bio last August in the hopes of making a safer version of a treatment approach that Sanofi and multiple other drugmakers had tried in the early 2000s but then backed away from because of neuropsychiatric concerns.
The biotech will pair nimacimab with one of the approved GLP-1 medications in an approximately 200-person Phase 2 set to start next quarter, Dhillon said. Patients will be on the drugs for 26 weeks and then go through 12 weeks of follow-up, the CEO added.
“You get this opportunity to focus on fat metabolism, energy efficiency, lean mass preservation, those aspects of the mechanism that the current treatment paradigm, the current class of drugs that are in the first-line area, the GLP-1s, are not focused on,” Dhillon said.
More obesity biotechs are likely to follow Skye onto the Nasdaq. Kallyope is eyeing a listing, Bloomberg News reported in January, and Aardvark Therapeutics could go forward with an IPO as soon as this summer, the FT reported last month.
