Sol-Gel sets terms for $60m Nasdaq IPO

Dermatological company Sol-Gel has begun its roadshow for a Nasdaq IPO scheduled for January 31. The company plans to raise $60 million at a $11-13 per share, reflecting a company value of $250 million. $25 million has already been guaranteed for parties who expressed interest in advance. The chief underwriters for the IPO are Jeffreys and BMO, and the sub-underwriters are JMP and Raymond James.

According to the prospectus for the offering, the company's leading product is a non-antibiotic product treatment of acne that has already passed Phase II trials on 726 patients, in which it achieved better results than a placebo. Phase III trials of Sol-Gel's product are scheduled to begin in 2018 and be completed in 2019. If it reaches the market, this product is likely to compete with an antibiotic produced by Israeli company Foamix Pharmaceuticals Ltd.(Nasdaq:FOMX), whose market cap is $249 million.

Sol-Gel planning Nasdaq IPO at $200-300m valuation

Sol-Gel reports positive Phase II acne trial

Sol-Gel has two other independent products in development: another product for treatment of acne and a product for treatment of rosacea, a skin disease (this product is also likely to complete with one of Foamix's products). Results from a Phase III trial of the rosacea product are due to arrive in 2019. Sol-Gel is also developing generic products in cooperation with other drug companies. Its leading such generic product, which is designed for treatment of inflammations caused by rosacea, is being developed in cooperation with Perrigo Company (NYSE:PRGO; TASE:PRGO). The connection between the two companies passes through Sol-Gel controlling shareholder Mori Arkin, who sold control of Agis Industries to Perrigo. Perrigo's dermatological activity is based on Agis.

Mori Arkin is the sole owner of Sol-Gel. When he acquired the company in 2014, Arkin also expressed interest in acquiring Foamix, but eventually decided to acquire Sol-Gel for $15 million. Sol-Gel owed Arkin $65 million, which was converted into shares as part of the deal. Sol-Gel has $12 million in cash and a $90 million equity deficit. The company lost $9 million in the first nine months of 2017, and has no revenue.

Sol-Gel tried to hold an IPO in 2015, but missed the window of opportunity. Its current try began in August, and it now appears that the market is open.

Arkin is also a shareholder in UroGen Pharma (Nasdaq: URGN), which held a successful offering last year and raised $60 million more this week. He plans to bring another of the companies he controls, Exalenz Bioscience Ltd. (TASE:EXEN), which performs breath testing for the digestive system, to Nasdaq this year.

Published by Globes [online], Israel Business News - www.globes-online.com - on January 24, 2018

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