LB Pharma opens biotech IPO window to open, bagged $285 million for key schizophrenia drug trials
The purpose of LB Pharmaceuticals is to show that old drug candidates can be old and new again, a modified version of Sanofi's decades-old schizophrenia drug. The strategy resonates with investors, whose interest in LB allows the company to increase its IPO size and raise $285 million for clinical trials.
New York-based LB's preliminary IPO clause set earlier this week is intended to offer more than 16.6 million shares of shares, ranging from $14 to $16, and will raise about $250 million at the midpoint of the price. LB raised the deal to 19 million shares late Wednesday, at a price of $15. These stocks will be traded on the Nasdaq under the stock symbol “LBRX”.
LB candidate LB-102 is derived from Amisulpride, a drug that emerged from Sanofi's lab in the 1980s. LB said in its IPO Fileing that despite the Sanofi drug as a treatment for schizophrenia, the drug giant has not received FDA approval due to the drug's remaining patent life.
Sanofi's Solian brand Amisulpride is an oral small molecule designed to block dopamine receptors, especially D2 and D3 receptors. Side effects of currently available dopamine receptor antagonists include drowsiness, weight gain, dyskinesia, and heart rhythm changes. LB says its modification of molecules improves its ability to cross the blood-brain barrier, with minimal impact on the ability of the drug to bind to its target.
“We believe that making this chemical change allows for a dose of LB-102 lower than Amisulpride,” the company said in the filing. “With lower-level administration, our goal is to reduce common side effects of amino sulfates. This change in chemical structure also allows us to differentiate the dose frequency of LB-102 from the dose frequency of Amisulpride. We are developing LB-102 to perform a dose of one dose, in contrast to the typical secondary dose of Amisulpride.”
In the second phase of the test, LB reported that all three doses of medications taken daily had statistically significant results compared to placebo, which was measured at scale for schizophrenia symptoms. Adverse events include insomnia, headache, anxiety, and agitation. LB indicates that weight gain is moderate and is independent of clinically meaningful signals in metabolic parameters.
LB now plans to continue the placebo-controlled Phase 3 clinical trial of LB-102 to evaluate low- and high-dose research drugs. The target enrollment is 400 patients. Like the second phase study, the main goal of the six-week phase 3 test was to measure score changes at baseline based on a scale used to assess symptoms of schizophrenia. LB plans to start the study in the first quarter of 2026; preliminary data for the second half of 2027 are expected.
The FDA needs two critical trials to support the approval of schizophrenia drugs. LB said in the document that based on FDA feedback and historical precedent, the Phase 2 study of LB-102 recruited 359 patients, which may be one of two key studies. If so, conducting an active 3-phase testing can allow companies to meet with the FDA in early 2028 to discuss regulatory submissions. But first, the FDA needs to agree that the second phase of the study is eligible as a key study. LB believes that LB-102 can apply in other instructions. Phase 2 testing of bipolar depression is planned to begin in the first quarter of 2026; preliminary data is expected to be conducted in early 2028.
LB initially submitted its IPO plan last month. New capital is urgently needed. Last spring, the cash tightening triggered a company's restructuring and layoffs. As of the end of June, LB reported its cash position of only $14.2 million. According to the document, with the gains of the IPO, LB plans to spend about $133 million for the third phase of testing of LB-102. Another $25 million budget is to pass the drug through the second phase of bipolar depression. LB is also developing a long-acting injection formula for LB-102, but the document specifies that these efforts are not high.
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