Life Pre- and Post-IPO: The journey of iX Biopharma and ASLAN Pharmaceuticals

Photo by krakenimages on Unsplash

By Shainan Hora

iX Biopharma is a Singapore public-listed late-stage pharmaceutical company with a primary focus on drug development and improving drug delivery using its innovative sublingual drug delivery technology. Its lead product under development, Wafermine, has completed Phase 2 and its pivotal Phase 3 developmental program has been agreed with the US FDA and Europe’s EMA. Founded in 2008, the company was listed on the Catalist board of the Singapore Exchange Securities Trading Limited (SGX-ST) in 2015.

Image provided by IX Biopharma shows the directors and management striking the gong to celebrate SGX’s 20th anniversary.

ASLAN Pharmaceuticals is a clinical-stage immunology focused biopharmaceutical company developing innovative treatments to transform the lives of patients. Founded in 2010, the company raised USD 33M from an initial public offering (IPO) in Taiwan in 2017 and was listed on Taipei Exchange (TPEx). In 2018, the company completed an IPO in the US, raising USD 43M, and started to trade on the Nasdaq Global market. Most recently in mid-2020, the company moved its primary listing venue to Nasdaq and delisted from TPEx.

We spoke to Ms Eva Tan, Director of Corporate and Commercial Strategy at iX Biopharma and Dr. Carl Firth, founder and CEO of ASLAN Pharmaceuticals, to find out about their decision and journey going public, how they deal with volatility and fluctuations in the stock market, as well as any advice for start-ups thinking of undertaking this path.

Image provided by ASLAN Pharmaceuticals shows the company listed on the Nasdaq Global market in US.

Has the vision and mission of the company stayed the same Pre- and Post-IPO?

iX Biopharma: Our vision has always been to develop therapies that will improve a patient’s quality of life. We are passionate about the human condition and with all our products, we hope to bring about perceptible, beneficial change to people. This is the guiding philosophy for everything we do. We evaluate every project against this principle.

Our mission, which is to combine active compounds with innovative drug delivery to get drugs quickly to market, has stayed the same. However our application of the mission is sharpened considerably, to focus on leveraging the full potential of our WaferiX sublingual drug delivery technology, which is our own versatile and novel platform technology, to develop products in different therapeutic areas.  Since IPO we have expanded from pain, to skincare, anxiety, sleep, sedation and other areas where Waferix can showcase its ability to improve patient outcomes by increasing the bioavailability of actives and achieving faster therapeutic effect.

ASLAN Pharmaceuticals: Our vision and mission has been focused on developing drugs that could change patients’ lives. There are lot of ways one can do this but for us it’s not about delivering small incremental improvements, but something that would make a significant impact. Hence for us as a company, the goal is to get a drug approved, a drug that would make a difference in patients’ lives.

One of the best exercises that I ever did at business school was to write my own Epitaph – the passage on your gravestone: what you want to be remembered for. For me, it would read that I contributed to a medical breakthrough that transformed the lives of patients.

One of the best exercises that I ever did at business school was to write my own Epitaph — the passage on your gravestone: what you want to be remembered for. For me, it would read that I contributed to a medical breakthrough that transformed the lives of patients.
— Dr. Carl Firth, founder and CEO of ASLAN Pharmaceuticals.

In preparation for IPO, how much did the company’s technology, development and commercial strategies change?

iX Biopharma: Our founder, Mr Eddy Lee, approached the healthcare and pharmaceuticals business as an experienced entrepreneur. After determining which segment was underserved, he assessed the skill sets needed before putting a team of like-minded experts to pursue the project.

At the time of listing, we were focused on developing our drugs for pain and erectile dysfunction. Drug development can be a lengthy, costly and complex process. It was therefore necessary to have a strong technical and scientific team to bring the requisite skill and experience in clinical research in our therapeutic areas of focus. For example, Dr Stephan Schug, who is globally recognised as a prominent key opinion leader in the field of pain and anaesthesiology, was brought onto our scientific advisory board.

Later on, as the Company pushed for commercialisation of the products developed, we added sales and marketing functions to the team.

ASLAN Pharmaceuticals: Today ASLAN is an immunology focused biotech company but when we started ten years ago, our focus was both oncology as well as immunology. We build our assets by in-licensing and acquiring drugs from other companies. Over the years due to changes in portfolio as well as with the inevitability (of ups and downs) in the industry, we ended up focusing much more on immunology.

During the early years of the company we brought in money through private financing and from investors closer to home but were always seeking to bring in money from overseas – as early as series B which was led by a well-known Chinese fund. As the capital requirements of the company grew, we started thinking about IPO sometime in 2014-2015 and after looking at multiple countries, market requirements and the pros and cons, we narrowed down to Taiwan, which at that time (2016) not only had the most IPOs in biotech outside of the US but also harboured a significant pool of investors with interest in biotech.  In 2017 after overcoming multiple hurdles, we became the first foreign biotech company to be listed in Taiwan.

Six months after the company was listed, the US market changed completely and the biotech sector saw a huge uptick and increase in popularity from public market investors. We quickly moved to take advantage of this group of investors, started an IPO process and within six months (2nd quarter of 2018) became a dual-listed company: our shares trading both in Taiwan and in the US. We spent most of our time interacting with investors, building relationships and connecting with them. As we felt more at home in the US market, which we believe has some of the highest quality companies in the world, we looked for opportunities to delist from Taiwan. We started the process early this year and having delisted just 2-3 months ago, today we only trade in the US. We are now where we need to be as a biotech and truly feel at home.

How do you deal with fluctuations and volatility in the market? Does the stock market’s day-to-day proceedings impact the company’s daily operations?

iX Biopharma: We don’t overly concern ourselves with day-to-day fluctuations unless there are unusual stock movements, in which case there are procedures in place to investigate the underlying reasons. We focus our energy on executing the strategies communicated to our investors, such as commercialising our medicinal cannabis in Australia, and expanding partnerships in China with our nutraceuticals and WaferiX technology. By focusing on the fundamentals, and maintaining clear communication with the market, we believe that our stock performance will fall in line.

In fact, we see small amounts of fluctuation and volatility as par for the course for a listed company. It presents opportunities for different types of investors to participate in our stock, such as short term traders, in addition to shareholders who participate for the longer term to reap the rewards of growth in the business. Investor interest allows the company to have greater visibility in the market and could be valuable to the biopharma sector as a whole.

We see small amounts of fluctuation and volatility as par for the course for a listed company. It presents opportunities for different types of investors to participate in our stock … in addition to shareholders who participate for the longer term to reap the rewards of growth in the business.
– Ms Eva Tan, Director of Corporate and Commercial Strategy at iX Biopharma.

ASLAN Pharmaceuticals: It does not because we don’t want our strategy to be driven by stock price. Our approach has been to go with a strategy that we think will deliver in the long-term and attract the shareholders as well the investors who not only believe in the assets but are with us in the long haul.

Ultimately, we want to ensure that our value is reflected in our share price and it’s our job to communicate that to our shareholders. We also need to have sufficient investors in the market trading the stock, otherwise low volumes and low liquidity will impact share price and may mean your stock price doesn’t reflect the true value of the company. Liquidity is much higher in the US than it is in other markets around the world, which is a real benefit of being in the US.

Is going public always good?

iX Biopharma: I can’t speak for everyone, but our experience has been very positive. As a public listed company, we benefit from ready access to capital, being able to attract and retain talent, and ease of establishing credibility with potential partners.

Going public has allowed us to easily tap into the market for funds needed for our drug development programmes and to pursue opportunities in medicinal cannabis and in the China market. If we did not have reliable access to funds, I expect that we would have to forgo many growth opportunities presented.

To attract and retain top talent, we must be able to remunerate them competitively. Being listed, our remuneration structure can include stock options and performance shares. Equity ownership motivates employees to increase the value of the business and ultimately align their interests with shareholder interest.

Due to our compliance with reporting requirements on the SGX, which is a reputable exchange known for robust supervision, potential partners are able to rely on our public disclosures when doing due diligence. This helps us to quickly establish our credibility as a suitable partner.

ASLAN Pharmaceuticals: As a public company, you are always in the public eye. But you also have ready access to capital when required. As a private company, it can sometimes be challenging and certainly time consuming to raise capital. As a development stage biotech (unlike a profitable or revenue-generating company), you are constantly thinking about the next fundraise. However, some private companies have been able to raise substantial amounts of capital as private companies, and for those companies there may well be a reason to stay private and avoid the overhead and additional costs associated with being a public company.

As a public company, we have raised USD 120M in a relatively short space of time and are now well placed. We have data on our lead asset coming out next year after which we will kick of our phase 2b program, which is likely to cost upwards of USD 50M. The public markets provide the best means of raising that sort of capital.

We posted a unique question to each company and captured their responses as seen below:

Can you highlight 3 of iX Biopharma’s biggest achievement/milestones accomplished since going IPO in 2015?

iX Biopharma: Firstly, we achieved our IPO objectives to develop Wafermine and Wafesil, our sublingual drugs for pain and male erectile dysfunction, respectively. For Wafermine, we delivered on our promise to complete Phase 2 development. Wafermine is now ready to be out-licensed to a suitable partner who will fund and complete phase 3 development.  As for Wafesil, we successful obtained marketing approval for the drug in Australia. Through these achievements we have demonstrated our expertise and ability to bring a product from development to regulatory approval.

Secondly, we expanded our product portfolio by leveraging our unique WaferiX sublingual delivery technology. Compared to during IPO, we now have a diverse and innovative portfolio of products, with 3 main revenue growth engines: Wafermine, medicinal cannabis; nutraceuticals and supergenerics. Each WaferiX-based product has the advantages of WaferiX – better and more predictable absorption and faster onset of therapeutic action. Our rich portfolio demonstrates the versatility of the WaferiX platform and the Group’s scalability and sustainability.

The third significant milestone for the Company is the shift from research & development to pushing for commercialisation. Now that we have built an impressive suite of products and pipeline, the Company is now pushing for these products to be commercialised. This year marked our maiden entry into the China pharmaceutical market with the out-licensing of Wafesil to a Chinese partner, and we commenced the sale of our nutraceuticals into China.

What do you think about the future of Biotech in Singapore and what are your thoughts on the landscape in terms of financial support from government and private sector?

ASLAN Pharmaceuticals: The ecosystem in Singapore is still nascent but growing. When we first started, Singapore was among the top countries in terms of innovative clinical development. We wanted access to clinical centres and technologies and this was the best place to kick-start the company and to establish certain collaborations. Over the years this has changed, our focus has gravitated from oncology to immunology with the US being the biggest playing field in the area. For us as a company we are more inclined towards the US and have started building a team there.

In terms of the landscape locally such as government support or private financing, we are moving in the right direction and the financial support is better than it used to be. Of course the support for early stage companies is great and that’s the reason we are here today but the support for late-stage companies is not as strong. We do need a number of small companies in our ecosystem, but we also need some sizable ones that can act as pillars of our ecosystem – that’s been the real driver of success in the US, in the UK, Switzerland, China and many other countries.

Finally, given your experience, what advice would you give to start-ups preparing for IPO in the future? 

iX Biopharma: Outside of numbers, going public requires you to sell your story and your roadmap for future growth. Learn how to communicate your vision, competitive strengths and plan of execution compellingly. This communication skill will serve you long after a successful listing, including during fund raising exercises, when recruiting or doing deals.

The first key thing is to ask yourself why you want to go IPO… Outside of numbers, going public requires you to sell your story and your roadmap for future growth… All public market investors really care about is the data you are delivering and the value you are creating in the pipeline.

ASLAN Pharmaceuticals: The first key thing is to ask yourself is why you want to go IPO. It’s not easy to run a public company and we didn’t set out to list the company when we started. There were lots of different possible exits.

For us, it was difficult to get access to private financing in this part of the world and as the company’s assets developed we found ourselves looking overseas and requiring access to large amounts of capital, so it made sense to explore the public markets. At some stage, our early investors also needed a liquidity event, so they would have the opportunity to exit their investment.

We also found that as a public company, investors don’t care so much about your geographical location. So being based in Singapore was irrelevant, all public market investors really care about is the data you are delivering and the value you are creating in the pipeline. 

Acknowledgments

We would also like to thank Mr. Eddy Lee, Chairman and CEO, iX Biopharma, and Mr. Stephen Doyle, Chief Business Officer at ASLAN Pharmaceuticals, for their support and help in arranging these interviews.

Biotech Connection Singapore (BCS) is part of an international network of non-profit organizations, that aims to promote the transfer of ideas from theory to real world applications by providing a platform for fostering interaction between academia, industry and businesses.

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