This page has been archived and commenting is disabled.

29-Year-Old Pulls Off Biggest Biotech IPO In History With Glaxo Throwaway Drug

Tyler Durden's picture




 

In March we asked “Are We In A Biotech Bubble?.” At the time, we pointed out a number of rather alarming statistics including the fact that there were 82 biotech IPOs in 2014, eclipsing 2000’s record of 67. 

We also noted that the number of biotechs with valuations that exceed $2 billion has quadrupled over the last four years alone. 

On Thursday, we got what might fairly be characterized as definitive evidence that investors have now abandoned any pretense of sanity when it comes to chasing the next blockbuster miracle drug. 

Enter Axovant Sciences. The company, which began trading today, is a spinoff Roivant Sciences, a shell created by 29-year old Vivek Ramaswamy after he left QVT last May. In December, Axovant bought an Alzheimer’s drug (RVT-101) that GlaxoSmithKline shelved years ago after 13 clinical trials for — get this — $5 million. So, just to be clear, Glaxo basically gave this thing away. 

(Ramaswamy)

What’s a $5 million throwaway drug worth in Janet Yellen’s “substantially stretched” biotech market? Billions, apparently. Axovant priced its (upsized, of course) offering last night at $15/share which valued the company at $1.3 billion give or take. Today, the shares have doubled.

But wait, there's more.

According to its S-1, the company has a grand total of seven employees, two of which, FT says, are Ramaswamy's mom and brother, who make $250,000 each and own 2 million options between them — the exercise price is $0.90, meaning the two got $58 million richer today on paper. 

Better still, note the following passage from the S-1:

We are an "emerging growth company" as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, enacted in April 2012, and therefore we intend to take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in this prospectus, our periodic reports and our proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. We may take advantage of these exemptions for up to five years or until we are no longer an "emerging growth company."

And here’s a look at the balance sheet:

But don't worry about the whole zero cash thing, because thanks to Thursday's blockbuster offering, Axovant will now have several hundred million to burn, and burn it they shall in what in all likelihood will be a futile attempt to get RVT-101 to market because after all, as one analyst told FT, phase 3 is a "graveyard for Alzheimer's drugs." 

*  *  *

As an aside, Ramaswamy's mom and brother aren't the only ones getting rich today. Visium Asset Management and RA Capital Management — who may have helped to create a buzz around the stock by "indicating an interest" in the shares earlier this month — apparently took down around 60% of the offering. From the company's amended S-1:

Visium Asset Management, LP and RA Capital Management indicated an interest in purchasing up to an aggregate of approximately $150.0 million of our common shares in this offering at the initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters may determine to sell more, fewer or no shares in this offering to any of these entities, or any of these entities may determine to purchase more, fewer or no shares in this offering. Any shares purchased by these entities in this offering will be subject to a 90-day lock-up agreement with the underwriters.

That seems like a pretty good deal, especially considering that 90 days is at the low-end of the range in terms of lockup periods. 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 06/11/2015 - 16:01 | 6187554 kaiserhoff
kaiserhoff's picture

Ramasmarmy.

At least his momma named him right.

Thu, 06/11/2015 - 16:25 | 6187618 813kml
813kml's picture

Axovant bought an Alzheimer’s drug (RVT-101) that GlaxoSmithKline shelved years ago

Maybe GSK just forgot about it.

Thu, 06/11/2015 - 16:34 | 6187715 Anusocracy
Anusocracy's picture

I gotta start investing in tulip bulbs.

Thu, 06/11/2015 - 16:53 | 6187796 MonetaryApostate
MonetaryApostate's picture

You mean Poppy Seeds?

Thu, 06/11/2015 - 18:32 | 6188114 nink
nink's picture

I earned $1.3 Billion Dollars working from home with a couple of friends for only a few hours a week

Thu, 06/11/2015 - 19:20 | 6188305 espirit
espirit's picture

In Zimbabwe?

Thu, 06/11/2015 - 20:49 | 6188538 sun tzu
sun tzu's picture

Wall Street

Thu, 06/11/2015 - 22:35 | 6188802 MSimon
MSimon's picture

Cannabis is good for Alzheimers. For this company to keep its valuation Federal Prohibition MUST stay in place

Thu, 06/11/2015 - 19:08 | 6188195 caconhma
caconhma's picture

It is much more to the story than ZH has told us. These are biotech being run by the WallStreet financial people. There are plenty of spin!

Axovant's CEO Vivek Ramaswamy is just 29 years old and was featured in Forbes' 30 Under 30 list last year. As a former partner at QVT Financial, he left the firm and founded Roivant Sciences, sits on the board of OnCore Biopharma and is chairman of the board of Tekmira Pharmaceuticals. He also achieved a degree in biology from Harvard College, and J.D. degree from Yale Law School—while working at QVT Financial.

Thu, 06/11/2015 - 19:16 | 6188284 THE 4th Quadrant
THE 4th Quadrant's picture

I've been saying all along bro, in many different ways. Be VERY fucking careful of these indians.

No offense ORI.

Fri, 06/12/2015 - 02:45 | 6189224 Ofelas
Ofelas's picture

I thought you put them all in reservations?

Thu, 06/11/2015 - 20:51 | 6188544 sun tzu
sun tzu's picture

So he's lawyer and a Wall Street banker. There's no more venomous snake in the world

Thu, 06/11/2015 - 23:59 | 6189007 The Rolling Thunder
The Rolling Thunder's picture

My best friend's ex-wife makes $75/hr on the laptop. She has been unemployed for eight months but last month her income with big fat bonus was over $15000 just working on the laptop for a few hours. Read more on this site..... www.Earnmore9.com

Thu, 06/11/2015 - 16:03 | 6187559 order66
order66's picture

Not sure what the big deal is, with the seasonal adjustments that's a solid company.

Thu, 06/11/2015 - 16:03 | 6187560 USisCorrupt
USisCorrupt's picture

Time for another DUMP Gold article.

Thu, 06/11/2015 - 16:11 | 6187602 astoriajoe
Thu, 06/11/2015 - 16:19 | 6187639 Consuelo
Consuelo's picture

The tide is going out...

 

 

Thu, 06/11/2015 - 18:50 | 6188189 espirit
espirit's picture

Got Collateral?

Thu, 06/11/2015 - 19:54 | 6188393 Sokhmate
Sokhmate's picture

As before a tsunami, it does?

Thu, 06/11/2015 - 16:04 | 6187567 netpounder
netpounder's picture

I want to IPO my Ebay account.  I need a capital management team ASAP.

Thu, 06/11/2015 - 19:18 | 6188296 espirit
espirit's picture

Get some interns to work 100+ hours per week for you, they're free.

Thu, 06/11/2015 - 16:09 | 6187568 Normalcy Bias
Normalcy Bias's picture

Wow. You mean there's someone even slicker than Kevin Tang?!

Thu, 06/11/2015 - 16:07 | 6187578 Ajax_USB_Port_R...
Ajax_USB_Port_Repair_Service_'s picture

Good job Vivek Ramaswamy! Can't blame the guy for taking full advantage of insane investors. Cash out and enjoy Mr. Ramaswamy.

Thu, 06/11/2015 - 16:27 | 6187691 Kirk2NCC1701
Kirk2NCC1701's picture

I don't think this guy needs our advice, given that he does not read ZH or speculate with PM.

There's a moral in here somewhere.   Ah yes... "Diversify your Income Streams and Investments beyond PM and Pb."

Thu, 06/11/2015 - 20:53 | 6188549 sun tzu
sun tzu's picture

I'm sure the average investor can purchase a $5 million drug patent and IPO it for $2.6 billion. Lesson learned

Thu, 06/11/2015 - 16:10 | 6187595 izzee
izzee's picture

So basically, are you confirming that "Indians" are too smart for their own good.

Navos, those two "gold futures" manipulators???

Or is it that the "System" just invites anyone with any kind of smarts to Get F*&^king RICH.

 

Mary Jo, Mary Jo, will undoubtably be on this like X on X, because she won't have to "recuse herself", and can Log another TakeDown for the SEC.

Thu, 06/11/2015 - 16:11 | 6187601 The Delicate Genius
The Delicate Genius's picture

good for him.

http://www.axovant.com/rvt-101/mechanism-of-action

interesting its being contemplated for use with another drug.

They're going to make a good percentage of the lightly, even pleasantly senile absolutely fucking psychotic.

doesn't mean it wont make money.

Thu, 06/11/2015 - 16:49 | 6187781 Marco
Marco's picture

So basically they are going to add this shit which doesn't work, but has a still running patent, to a generic drug ... and then market the shit out of it with all the billions they made from the IPO. I could actually see this company doing well.

Thu, 06/11/2015 - 19:29 | 6188342 The Delicate Genius
The Delicate Genius's picture

bingo.

 

Hey, for fuck's sake - for most people on antidepressants and statins, moderate exercise and reasonable diet would do it.  Can you wrap your head around the collusion between medicine and pharma that most people taking most drugs are doing so because no one tells them to take a bike ride to the fuckin' salad place?

 

 

Fri, 06/12/2015 - 03:02 | 6189236 zuuuueri
zuuuueri's picture

are you somehow under the mistaken impression that anyone involved in this intends to bring a drug to market?

Fri, 06/12/2015 - 04:36 | 6189295 EddieLomax
EddieLomax's picture

Reading through that literature is interesting, the word "believe" comes up so many times, along with other vague phrases

 

"These neurotransmitters are understood to be critical"

"it is believed that 5-HT6 receptor antagonists have limited peripheral side effects"

"Therefore, when used in combination with one another, we believe that 5-HT6 receptor antagonists"

"scientific literature suggests that 5-HT6 receptor antagonists may also improve neural structural plasticity"

"According to published literature"

"This is believed to promote the increased expression of PSA-NCAM by young neurons"

"may provide another reason to believe that RVT-101 may impact the progression of dementia" - triple may there even!  This appears to be written by someone who was not good at English, but obviously good enough to scam $1.3 billion off of greater fools.

 

I think there is just one paragraph that did not have a ambiguity in there, the introduction.  The whole thing sounds extremely unlikely, yet there is $1.3 billion invested in it now.

This is a poster child for how poorly our fiat money is valued when so much is poured into something of so questionable value, we desperately need a correction here!

Thu, 06/11/2015 - 16:12 | 6187605 Mike Honcho
Mike Honcho's picture

"That's just fiddlesticks!" - Jack Ma

Thu, 06/11/2015 - 16:13 | 6187608 Jaspergers
Jaspergers's picture

I wonder how long it will take to find out that the stock market has been a massive money laundering scheme for the past few decades..

 

Thu, 06/11/2015 - 16:51 | 6187789 Bangin7GramRocks
Bangin7GramRocks's picture

Bullish for GSK. They can now get big money for the rest of the dead end shit drugs they have sitting on a shelf. The copycats will start paying a hundred million to buy a drug with no chance of approval.

Thu, 06/11/2015 - 16:15 | 6187619 youngman
youngman's picture

It just shows that medical costs are not going to be going down anytime soon......if they do get this drug to market..its going to be expensive...it has to be to be a legitimate company...

Thu, 06/11/2015 - 16:17 | 6187630 Gerb00
Gerb00's picture

The name ' Ramaswamy' didn't tip you off? Nowadays a sucker is born every 30 seconds as Ignant DuhMericans attentions spans continue to get shorter and their analytical skills all but dissapear There is an App for that right? This generation of  kids coming up since the advent of the 'smart phone' are going to be the most mal adjusted ignorant bunch at the shallow end of the gene pool. The only saving grace for DuhMericans is that all the other industrialized countries and even most of the 3rd world countries also have generations in the same class.

Thu, 06/11/2015 - 16:29 | 6187695 Consuelo
Consuelo's picture

Last go-around, a veritable shitload of 'Ramaswamy' Kuldeeps packed their shittery for greener Rupees when the layoffs came and their brand new option-bought homes took a valuation nose-dive.   Because after all, being an 'American' is all about the $$$opportunities, and when those $opportunities dry up, well...   It's back to taking a cool bath in the same cholera-infested waters that you drink from and admiring how clean the streets are back home...

Don't let the door hit you in the ass on the way out...

 

 

 

 

Fri, 06/12/2015 - 00:48 | 6189097 nosam
nosam's picture

So much open hatred for Indians here. Mainly for the big crime of going after opportunities.

I suppose you wouldnt do such a horrible thing.

Thu, 06/11/2015 - 16:29 | 6187698 Divine Wind
Divine Wind's picture

 

 

 

I was saying the same thing about Alibaba.

Ask anyone who has served over in the Middle East.

In several countries, including Iraq, Ali Baba is the phrase used for "thief."

Thu, 06/11/2015 - 21:56 | 6188708 U-P-G-R-A-Y-E-D-D
U-P-G-R-A-Y-E-D-D's picture

Correct. Although it is also a halal term for riding "piggy back" on someone. Same idea as the thieving company...

Thu, 06/11/2015 - 16:20 | 6187641 City_Of_Champyinz
City_Of_Champyinz's picture

Jesus Fucking Christ this world is getting more fucked up by the second...

Thu, 06/11/2015 - 16:38 | 6187727 Kirk2NCC1701
Kirk2NCC1701's picture

I think the following prayer might be useful to you and similar-minded people :

"God give me the strength to change the things I can, to accept the things I cannot, and the wisdom to know the difference."

 

The more Libertarians direct their energies, time and assets toward the things they can change, the less they will have to worry or agonize over the things they cannot change (at this time).

Mull it over, internalize it; then plan and act accordingly. 

Thu, 06/11/2015 - 18:33 | 6188123 techstrategy
techstrategy's picture

We can change most everything if we the people have the courage to try.  Divest their control frauds (not really TBTJ "equities" and Protection Rackets like AMZN and NFLX).  Raise cash and ST UST.  Acquire LOADS of physical gold (take the portfolio toward 10%).  Invest in domestic producers.  And boycott companies like AMZN that exist purely because of the capital market subsidy (the logical limit of gutting communities via centralized control structures).

Thu, 06/11/2015 - 20:56 | 6188554 Gent
Gent's picture

Actually, the fuckupedness can now be measured in milliseconds

Thu, 06/11/2015 - 16:23 | 6187662 KashNCarry
KashNCarry's picture

Who you jivin' with that cosmik debris? https://www.youtube.com/watch?v=wtx4ZJ1cwI0

Thu, 06/11/2015 - 16:23 | 6187663 caconhma
caconhma's picture

This scam is not biotech specific. There are plenty solid, very profitable,  excellectly valued biotech companies like AMGN, BIIB, GILD, etc., to name few. The problem is with the WallStreet casino, the Congress, and the FED policies. 

The WallStreet is just cleaning up pension funds, insurance companies, and whatever left from retail investors-gamblers. 

 

Thu, 06/11/2015 - 16:43 | 6187745 Dr. Bonzo
Dr. Bonzo's picture

And he did it all without having to blow up the World Trade Center. Are we learning yet... looking at you Larry Silverstein, you malignant mass-murdering fuck.

 

Good scam kid.

Thu, 06/11/2015 - 16:54 | 6187801 Panic Mode
Panic Mode's picture

This is so 1929.

Thu, 06/11/2015 - 17:10 | 6187867 CarpetShag
CarpetShag's picture

Ram it up your swami.

Thu, 06/11/2015 - 17:32 | 6187956 Biggieshort
Biggieshort's picture

When Mr. Reality gets back from vacation, some heads are gonna roll.

https://www.youtube.com/watch?v=XDQjtCfUhPw

Thu, 06/11/2015 - 17:39 | 6187977 AGuy
AGuy's picture

FWIW: New Drug development is basically DOA because of Obamacare. Manage care will only add generics to their list of approved drugs. There is no market for new label brand drugs anymore, unless its cheaper than an existing product.

 

 

Thu, 06/11/2015 - 17:52 | 6188015 Hungarian Pengos
Hungarian Pengos's picture

I made $43 million trading Grilled Cheese Truck shares and will be plowing my profits into this bitchez.

Thu, 06/11/2015 - 18:17 | 6188086 Palladin
Palladin's picture

While Glaxo might have sold it to them for only $5M there are a few strings attached to the sale:

Besides an upfront fee of $5 million, Axovant is obligated to pay Glaxo an additional $5 million if tests show the drug to be sufficient to obtain FDA approval. It is also obligated to pay Glaxo another $70 million as it gains approval in the U.S., Europe and Japan, as well as an additional one-time payment of $85 million for the first year it achieves global net sales of $1.2 billion for RVT-101. And Axovant is obligated to pay Glaxo a fixed 12.5% royalty based on net sales of RVT-101.

http://news.investors.com/061115-756887-axovant-ipo-sets-record-for-proc...

Thu, 06/11/2015 - 19:15 | 6188264 espirit
espirit's picture

Fuck, they'll be able to sell it at a discount to any surviving population.

Even rat testicle extract can be marketed to the unknowing without FDA approval.

Fri, 06/12/2015 - 08:59 | 6189724 astoriajoe
astoriajoe's picture

Organic and all natural rat testicle extract. 

Thu, 06/11/2015 - 18:26 | 6188103 TheAntiProgressive
TheAntiProgressive's picture

No one cares about the steak, it is all about the sizzle.  Pump and dump..

Thu, 06/11/2015 - 19:04 | 6188241 kchrisc
kchrisc's picture

I smell a rat.

I don't believe the story surrounding this for even a second.

There is another story and game afoot, and a whole lot of Amongst under the rug.

Sort of like that NYC burger joint IPO a few months ago. That company is really owned and controlled by an Amongst, using a non-Amongst as a "friendly face."

Liberty is a demand. Tyranny is submission..

Thu, 06/11/2015 - 19:51 | 6188389 Downtoolong
Downtoolong's picture

All they need is one non-shill greater fool investor to buy a few shares and they can pay next months electric bill.

Thu, 06/11/2015 - 20:15 | 6188460 AUD
AUD's picture

The system works!

Thu, 06/11/2015 - 21:16 | 6188613 Atomizer
Atomizer's picture

According to the charts, he's living in 2012 P/E.  I would sell to make money. IMHO

Thu, 06/11/2015 - 21:28 | 6188640 Yen Cross
Yen Cross's picture

  The 90 day "lockout" is pretty short, but you know most of his equity is in options that vest much further out. The ALGO's are gonna have fun pumping and dumping this one.

  Welcome to "Camp Tardicaca", and don't forget to BTFATH. These markets make the shittiest Casino in Venezuela look like Wally~World.

Thu, 06/11/2015 - 21:29 | 6188643 Atomizer
Atomizer's picture

If my wife was not overseas, she would look at the picture and call him a dirty indian thief. I would be told not to invest money.

Chinese and India people don't get along. Simple as that.

Thu, 06/11/2015 - 21:56 | 6188707 yogibear
yogibear's picture

IPO frenzy. Too much hot money chasing anything.

Fri, 06/12/2015 - 10:57 | 6190119 teslaberry
teslaberry's picture

forget these little squirts trying to make a billion buk.

the major game of looting at the trillions level is STILL BIG PHARMA overstuffing 90% of people with drugs.

 

if the pharma companies had their way drugs of all sorts would be mandatorry. 

we will all be ANTI-X'ERS. for every fucking 'law' passed requiring mandatory drugging of the public. 

 

if you are pro mandatory vaccine legislation you are not only a fucking moron sheeple tool, but you are also an enemy of anyone who refuses to subject themselves to the needles of a government bent on punishing people with a jail cell, or worse, taking away their children, because of a refusal to cooperate. 

 

 

Do NOT follow this link or you will be banned from the site!