Orphinic Scientific, a Polish biopharma portfolio company, is in talks with VC funds to raise between USD 10m and USD 50m, and could consider listing or a SPAC transaction on the US Nasdaq next year, CEO Adam Kruszewski said.
The company plans to raise up to USD 50m in tranches, dependent on data readout and milestones of its portfolio companies, Kruszewski said. Orphinic Scientific anticipates raising a first tranche of about USD 10m in 2022, he added, declining to give a firmer timeline.
Management is in talks with two US-based investment banks as it is looking to mandate an advisor for both the fundraise and the proposed US listing, Kruszewski said.
The company welcomes approaches from investors, particularly US-based VC funds, he said, as it is focused on expanding its footprint in the US market where investors are savvy of its business model.
Orphinic plans to merge this year with its US-based portfolio company Vasa Therapeutics to become Delaware-registered and San-Diego headquartered Orphinic Inc, he said, which is a more attractive proposition to American investors.
The company has undertaken an undisclosed iinternal valuation and is also loo king to complete a third- party valuation, he said.
The proceeds from the first round will be used for US market entry, to finance development and registration of its portfolio companies' most advanced drug candidates, and to provide the company some months' runway, Kruszewski said.
Orphinic will look to exit at least one of its portfolio companies within one year ideally through a sale to a pharmaceutical player, he added.
Part of the USD 50m fundraise could eventually be raised through the proposed Nasdaq listing, Kruszewski said, at which time the company could also assess a SPAC transaction, he said.
Kruszewski declined to comment on how much it could raise on the listing, but pointed to comparable companies such as BridgeBio [(NASDAQ:BIO), Boston Pharmaceuticals, Roivant Sciences [NASDAQ:ROM] and Biohaven Pharmaceuticals [NYSE:BHVN).
In mid-2021, Switzerland-based Roivant Science merged with Patient Square Capital's SPAC Montes Archimedes Acquisition Corp, and is expected to list on Nasdaq with a USD 7.3bn market cap, as reported.
Orphinic has dropped earlier plans to list in Warsaw, Kruszewski said, as the US market offers greater interest from potential investors and a higher valuation. He also cited an absence of benchmark companies in Poland.
Milestones and strategy
Oprhinic invests in distressed assets and single-molecule companies that have potential, but which have not undertaken optimal clinical trial design or are not operationally sound, Kruszewski said.
These assets are typically one-product companies addressing orphan diseases, or have molecules with proven safety and good market potential, whose management struggle to advance them further, he said
Orphinic injects know-how along with equity into its companies so that their products can be advanced owards commercialisation then sold to large pharma players, he said.
It manages risk by investing in about 10 products at any one time, he said, so that the few portfolio companies that fail clinical trials are hedged by the majority of products with statistical significance.
Orphinic's competencies include selecting investment targets, running optimal clinical trials and then managing the product's sale to a pharma player, he said. The investment period for its portfolio companies and products is about three years, he noted, adding that it invests in projects globally.
One of its most advanced projects, Tramag, is an opioid-based painkiller that is certified and at market registration stage with an anticipated 2023 exit.
Orphinic has an experienced management team, Kruszewski said. Co-founder Artur Plonowski has over 20 years of experience in the biotech and pharma industries and CFO Maciej Wronski has extended experience in management consulting, according to the company website.
Kruszewski managed and sold a full-service contract research organization KCR in the past.
Orphinic was established in 2019 and has about 30 employees, he said.
by Joanna Socha in Warsaw and Mintoi Chessa-Florea in London