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The IPO window has closed for most biotech companies this year, but Third Harmonic Bio is opening it with a drug from Novartis that may work better than the wide selection of inflammation drugs already available to patients. The biotech has early clinical data showing signs of efficacy. The company now wants to take advantage of the public markets to fund further clinical development of the molecule in multiple inflammatory diseases.

Cambridge, Mass.-based Third Harmonic has not set any financial terms for the stock sale outlined in the preliminary IPO documents filed with regulators on Tuesday. However, IPO research firm Renaissance Capital said the offering could be as high as $150 million. Third Harmonic is applying to list on Nasdaq under the ticker symbol “THRD”.

Third Harmonic’s research focuses on mast cells, a type of immune cell in the blood whose dysfunction is linked to the development of many allergic and inflammatory diseases. These cells are found throughout the body and are prominent on tissues exposed to the external environment, such as the skin, respiratory tract, and gastrointestinal tract.

Lead Third Harmonic drug THB001 is a small molecule designed to block KIT, a cell surface receptor whose role is to regulate mast cells. In the IPO filing, the company noted that KIT inhibition has shown signs of efficacy in mast cell-mediated diseases such as asthma. A wide range of therapies already treat asthma and other inflammatory diseases, but Third Harmonic notes in the filing that many of these drugs are insufficient because they target compounds that are produced by mast cells, such as histamines. For many diseases, multiple compounds are involved.

“As a result, we believe that targeting mast cells directly through highly selective inhibition of KIT is key to achieving the clinical efficacy required for broad symptomatic relief in a range of allergic and other inflammatory diseases,” Third Harmonic said in the filing.

So far, Third Harmonic has tested its lead drug in a Phase 1a clinical trial. Although this study involved only healthy volunteers, the drug shows indications of efficacy. The company reported that blood tests showed dose-dependent decreases in tryptase, an enzyme released when mast cells are activated. Third Harmonic now aims to test whether its drug can treat chronic urticaria, an inflammatory skin condition characterized by hives and an itchy rash. The company said in the filing that it has filed a clinical trial application in Europe for a phase 1b dose-escalation study designed to show proof of concept in this disease. The data is expected in the second half of next year.

Asthma is the next disease target. Third Harmonic plans to initiate a Phase 1b study in the first half of 2023 and report data in the second half of 2024. The biotech also expects to begin Phase 2 trials in chronic spontaneous urticaria. These studies in the US and Europe are planned for the first half of 2024. Third Harmonic describes its lead asset as a “pipeline in product”. The company is investigating other diseases where stopping the inflammation caused by mast cells could offer relief.

Third Harmonic has competition in the search for a better drug for urticaria, a condition for which antihistamines are the first line of treatment. Blocking KIT is the target of Celldex Therapeutics’ drug Barzolvolimab, formerly known as CDX-0159. The Hampton, New Jersey-based biotech has reached early clinical development in urticaria and other inflammatory diseases. But as an antibody, this drug must be administered as an intravenous infusion. Third Harmonic hopes that the oral formulation of their KIT-blocking drug gives them an advantage.

Third Harmonic is led by CEO Natalie Halls, who was previously CEO of gene therapy developer Audentes Therapeutics (now part of Astellas Pharma). Venture capital firm Atlas Venture founded Third Harmonic in 2019. That same year, it licensed THB001 from Novartis for $400,000 in cash and equity in the emerging biotech. Much more could be paid out depending on the progress of the research: $31.7 million related to development milestones and up to $200 million in sales and commercialization milestones. Novartis will also earn royalties on the sale of any approved products.

Third Harmonic raised $155 million in its early, last a $105 million Series B round which was announced in February. Atlas is the largest shareholder with a 37.9% stake, according to the filing. Novartis Biomedical Research Institutes owns 9.4% of the company.

As of June 30, Third Harmonic’s cash position was $112.7 million, which the company says will be enough to fund operations for at least 12 months. Third Harmonic plans to use the IPO money to continue clinical development of TBH100, specifically the Phase 1b study in chronic inducible urticaria and the Phase 2 trial in chronic spontaneous urticaria. The money will support a planned phase 1b trial in asthma. The biotech also said in the filing that the capital could be deployed to develop or acquire other programs.

photo: DevrimbGetty Images

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