Multiple sclerosis biotech Forward Pharma sets terms for $200 million IPO

Forward Pharma, a biotech developing a slow release formulation of a multiple sclerosis treatment, announced terms for its IPO on Thursday. The Copenhagen, Denmark-based company plans to raise $200 million by offering 9.5 million ADSs at a price range of $20 to $22. At the midpoint of the proposed range, Forward Pharma would command a fully diluted market value of $945 million.

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Forward Pharma is planning a Phase 3 trial for its proprietary formulation of dimethyl fumarate (DMF) for relapsing remitting MS. It claims its lead candidate, FP187, has a better slow-release structure and a coating that erodes in the small intestine but not the stomach. The company targets Biogen Idec's Tecfidera, an oral MS treatment that generated $2.1 billion in sales in the year following its March 2013 approval. 

Primary shareholders include Nordic Biotech, BioScience Managers and BVF Partners LP, which has indicated an interest to purchase up to $25 million worth of shares on the offering.

The biggest biotech IPO
At the midpoint of the range, Forward Pharma would be the year's largest biotech, both in terms of deal size and market cap. The company is set to raise 57% more proceeds than the current largest, July IPO Kite Pharma (KITE), and have a 29% higher market cap. The six biotechs that have raised $100 million or more this year only did so by pricing above the midpoint. Two in 2013 raised over $150 million - Ophthotech and Intrexon -averaging 72% and 10%, respectively. There have been 57 biotech IPOs this year (27% of alI POs) that on average have raised $66 million at a fully diluted market cap of $237 million. Another large biotech, and the only one this year with Goldman as its lead underwriter, submitted an initial filing yesterday.

Forward Pharma, which was founded in 2005, plans to list on the NASDAQ under the symbol FWP. Forward Pharma initially filed confidentially on April 9, 2014. Leerink Partners, Jefferies and RBC Capital Markets are the joint bookrunners on the deal. It is expected to price during the week of October 13, 2014.