Nightstar files for $86M IPO to fund gene therapy trials

Nightstar Therapeutics has filed to raise up to $86 million in a Nasdaq IPO. The money will equip Nightstar to complete a phase 3 trial of its choroideremia gene therapy and advance two other eye disease candidates through early-stage clinical studies.

London-based Nightstar, also known as NightstaRx, is set to move the choroideremia asset into phase 3 in the first half of next year. The therapy, NSR-REP1, is advancing into the 140-patient trial on the strength of data on 32 subjects treated in investigator-sponsored studies. Those trials found 90% of patients either maintained or improved their visual acuity in the year after receiving the gene therapy.

Given choroideremia causes currently-untreatable progressive vision loss, Nightstar sees the data as supporting further development. The asset is moving forward with a fairly clean safety profile in the 50 people treated to date. Investigators have seen one adverse event—transient intraocular inflammation—that may have stemmed from treatment with NSR-REP1.  

Challenges await Nightstar as it scales up for the phase 3 trial and potentially commercial sales, though. The biotech acknowledges the administration of NSR-REP1 requires "significant skill and training," potentially creating a bottleneck to use of the gene therapy. And as a small, unpartnered player in a new field, any number of events could knock it off course.

What Nightstar does have is a head start. Spark Therapeutics has the most advanced challenger to NSR-REP1 but its program is yet to move past phase 1/2. The field is similarly clear for Nightstar’s follow-up candidate NSR-RPGR, which moved into the clinic just ahead of MeiraGTx’s rival X-linked retinitis pigmentosa gene therapy. AGTC’s Biogen-partnered candidate is close behind.

Nightstar has reached this point using money from a succession of private rounds, starting with the £12 million Syncona invested when the biotech spun out of the University of Oxford in 2014. The biotech pulled in a further £5 million when it named former Johnson & Johnson VP David Fellows as CEO early in 2015. A $35 million series B round followed late in 2015. And Nightstar broadened its investor base and raised a further $45 million in a series C round a few months ago.

Along the way, Nightstar has built out a team in preparation for the broadening of its clinical trial program and life on public markets. Last month, Ex-Pfizer clinical lead Tuyen Ong, M.D., left PTC Therapeutics to serve as chief development officer. And in April, Nightstar hinted at its IPO plans by recruiting the man who led Intercept Pharmaceuticals’ repeated public raises, Senthil Sundaram.  

The question now is how receptive public investors are to gene therapy biotechs. The companies in the sector to go public to date have delivered mixed returns, with the successes of bluebird bio and Spark offset by the steady decline of uniQure and implosion of Dimension Therapeutics.