A Nanotechnology IPO From Selecta Biosciences
Nanotechnology was all the rage back in 2004 when George Dubya Bush signed the Nanotechnology Research and Development Act and investors caught wind of a potential opportunity. This, of course, prompted us to start Nanalyze as we were dying to figure out how we could get a piece of that nano action as retail investors. The problem was that nanotechnology went nowhere fast. In the words of the much talked about lately Peter Thiel, “‘We wanted flying cars, instead we got 140 characters.‘” This couldn’t be better expressed than by looking at the below chart from Google Trends:
The truth is that nanotechnology hasn’t gone away at all. Nanotechnology has taken on new names such as “synthetic biology” or “graphene” or “gene editing”. Scientists are now building little biological machines that do what we tell them to do. Isn’t that what nanotechnology promised us? Little machines that would do what we programmed them to? While social media may have distracted the masses momentarily, nanotechnology continues to show promises of changing the world, and just last week we saw a proper nanotechnology company file for IPO. Let’s take a closer look at the planned IPO of Selecta Biosciences.
We first wrote about Selecta Biosciences back in December of 2013 and highlighted their synthetic vaccine against nicotine which is expected to address the massive “help you stop smoking” market. Selecta has developed a nanoparticle for drug delivery which in their words does the following:
Our proprietary SVP technology encapsulates an immunomodulator in biodegradable nanoparticles to induce antigen-specific immune tolerance to mitigate the formation of ADAs in response to life-sustaining biologic drugs.
For those of us with no medical pedigree, we’ll have to translate that to mean that they’re using nanoparticles for drug delivery which are superior to existing methods that don’t use nanoparticles. Instead of scrutinizing the technology, let’s take a look at who is backing the company, who the founders are, and who the Company has partnerships with.
Selecta Biosciences was co-founded by MIT’s Robert Langer, a prolific scientist who has founded 20 biotech companies so far including a nanotechnology drug delivery company BIND Therapeutics which we profiled in an earlier article. Unfortunately, BIND has lost -97% of its share price value since their IPO but you can’t win them all. Selecta has taken in over $168 million in funding so far from high profile investors including Polaris Partners, Flagship Ventures, NanoDimension, and Sanofi. The investment from Sanofi shouldn’t come as a surprise, because in 2012 Selecta entered into a deal with Sanofi, the world’s fourth-largest company by prescription sales, to discover antigen-specific immunotherapies for food allergies.
So what sorts of things is Selecta Biosciences going to get up to provided they can finish out a successful IPO? Here’s their current pipeline:
While the pipeline looks stacked, we’re much more interested in milestones. For their lead product SEL-212, they’re expecting “final data from Phase 1a and Phase 1b trials and initiation of Phase 2 trial expected in the second half of 2016“. In our previous article titled “The FDA Approval Process Simply Explained“, we noted that Phase 2 trials typically take around 2 years to complete.
The Selecta Biosciences lead candidate is targeting gout. If you’re not sure what gout is, here’s a quick description from the National Institute of Health:
Gout is a painful condition that occurs when the bodily waste product uric acid is deposited as needle-like crystals in the joints and/or soft tissues. In the joints, these uric acid crystals cause inflammatory arthritis, which in turn leads to intermittent swelling, redness, heat, pain, and stiffness in the joints.
While we may have to wait a few years to find out if Selecta Biosciences has a revolutionary treatment for gout, it would be good to know just how big the market is for gout in the USA. We had one of our on-staff PHDs research “cases of gout in the USA” using Google and we learned that the prevalence of gout among US adults in 2007–2008 was 3.9% which equates to roughly 12 million people today. That’s a decent population size, and if this proves to be a revolutionary treatment then Selecta Biosciences has a fairly large market to capture.
The whole idea behind the hype of nanotechnology was that scientists believed that at 100 nanometers and below, the physical properties of materials would change, and as a result, we could do amazing things because the laws of physics no longer applied. This is exactly what we’re hoping for by betting on companies like Selecta Biosciences. We’re hoping that their world-class leadership and subject matter expertise will result in nanotechnology finally living up to its potential.
We’ve switched from carbon nanotubes to graphene while looking for the next revolutionary nanomaterial that will change the world and make us rich. Nanoparticles in healthcare are much more difficult to understand, but they are what made Dr. Patrick Soon Shiong the richest man in healthcare today. If you’re excited to take a punt on the Selecta Biosciences IPO, don’t just go in with your guns blazing on opening day. Try and accumulate your position over 4-6 months by buying a fraction each month and you’ll mitigate market timing risk. Selecta Biosciences will trade under the ticker SELB.
Here at Nanalyze, we complement our tech investments with a portfolio of 30 dividend growth stocks that pay us increasing income every year. Find out which ones in the Quantigence report freely available to Nanalyze subscribers.