Hyperion Therapeutics Opens Up 5% Post-IPO

July 26, 2012 - Dow Jones VentureWire

by Lynn Cowan

Biopharmaceutical firm Hyperion Therapeutics Inc. (HPTX) shares opened higher Thursday on its stock-market debut.

The company's shares opened at $10.50 apiece on the Nasdaq Stock Market, according to FactSet, up 5% from their initial-public-offering price of $10. It sold 4.2 million shares at a price below its expected $11-to-$13 range.

In recent trading shares trimmed some gains, changing hands at $10.17.

Hyperion is focused on developing treatments for orphan diseases--so-called because they are rare, affecting fewer than 200,000 people in the U.S.--and hepatology. Orphan drug approval by the Food and Drug Administration leads to drug marketing exclusivity for seven years.

The company is developing a drug to treat urea cycle disorders, known as U.C.D., and hepatic encephalopathy, both of which result in elevated ammonia levels in the blood. Such levels are potentially toxic and can lead to serious medical complications or death. The company is expected to learn of the drug's approval status from the Food and Drug Administration by late October and expects to launch the treatment, called Ravicti, in the first half of 2013. It is also running clinical trials using Ravicti for other conditions, but they aren't as far along in the process.

Hyperion has only the one drug candidate in the pipeline, so it isn't as diversified as companies that have multiple candidates in the testing phase. It believes the number of individuals in the U.S. with U.C.D. is about 2,100, potentially limiting revenue.

Unlike some biopharmaceutical firms that have been developing their own drugs, Hyperion purchased the world-wide rights to Ravicti from Ucyclyd Pharma, a subsidiary of Medicis Pharmaceutical Corp. (MRX), in March for $6 million, and has the option to purchase all of that company's rights for another drug already approved for U.C.D. patients.

Hyperion hasn't booked any revenue to date, nor has it been profitable. Its independent accounting firm said its recurring losses raise substantial doubt about its ability to continue as a going concern.