Auxilius Pharma will consider 4Q21 fundraise ahead of a potential IPO in 2022 - execs

16 March 2021 - 07:09 am UTC

by Joanna Socha in Warsaw

Auxilius Pharma, a Poland-based start-up focused on value-added generic drugs, will look at fundraising later this year ahead of a possible listing in 2022, company executives told Mergermarket.

 

Auxilius will look at raising more than EUR 1m in the final quarter of this year, CEO Jedrzej Litwiniuk said. Potential investors in the round could be individuals, mainly from Poland and Germany, he said, although the company will also be talking with undisclosed funds. 

 

The IPO’s timing depends on the company’s progress, but it could realistically occur in 2022, Litwiniuk and Andrzej Domanski, responsible for the company's IR and fundraising, said. Auxilius expects to generate its first revenue of about USD 10m in 2023, Litwiniuk said.

 

The company will consider listing on either the NewConnect trading platform in Poland, or one of the Western European stock markets, like Euronext, the executives said, adding that the decision will depend on Auxilius’ valuation. They declined to disclose what valuation it will target or how much it anticipates raising via the listing.

 

New shares will account for the vast majority of the stock market offering, they said, adding that the founders have no plans to exit. Litwiniuk and Dr Uwe Tigor founded the business in January 2019. 

 

While Auxilius Pharma does not use advisors at the moment, it will be looking to issue mandates for the capital raise and the IPO, the executives said. It also expects to mandate a US-based regulatory advisor in April, to help with FDA certification, Litwiniuk said. 

 

For the time being, Auxilius is focusing on closing a small add-on to its second funding round, which initially closed in February, and will onboard two investors within two to three weeks, Litwiniuk  said. This round amounts to more than PLN 2.1m (EUR 457,000) in total, and was raised using a double-digit-million-zloty valuation, he said, without providing exact numbers. 

 

The company’s major shareholders include around ten private individuals, mostly from Poland but also from Germany and Italy, the executives said. Its first, PLN 700,000 round was raised from friends and family a year ago, Litwiniuk said.  

 

Auxilius will put funds raised via an IPO towards R&D costs, drug creation and formulation, and clinical trials, the executives said.

 

The company will also look for a distribution partner in the US, they said. 

 

It is working on a new formulation of a cardiological drug which it wants to introduce to the US market, and potentially in Europe as well. It will soon file for an international patent, seeking protection in the US, major European and ultimately also Asian markets, they said. It will look to have clinical trials, they said; the process will depend on the FDA, with which the company expects to have a pre-investigational new drug application meeting in autumn, they said. 

 

It expects to hold a pre-IND meeting four or five months after mandating the regulatory advisor, Litwiniuk said.

 

Auxilius Pharma expects to generate its first revenue from its first partnership on the cardiological drug, he said, adding that revenue streams will come from up-front payments from the partners and licence fees. 

 

The company intends to significantly improve existing drugs so that they are more comfortable for patients, for instance to make them less frequently administered or have fewer side effects, the executives said, adding that inconsistency and failure to follow recommended use of medications are among the main reasons for ineffective therapy. Many popular drugs were created decades ago and could be improved with today’s technologies, and while big corporations focus on costly development of innovative drugs, Auxilius is focusing on reformulated drugs, which is cheaper and can cost a few million euros, they said.

 

The company was established in January 2019.