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CG Oncology Plans IPO; $1B Valuation

Cancer research firm CG Oncology Inc., which has a novel treatment that’s been called a “game changer” for bladder cancer, is aiming for a $1 billion valuation when it goes public in the coming days.

The Irvine-based company on Jan. 2 filed an S-1 with the Securities and Exchange Commission.

The company plans to raise $201 million by offering 11.8 million shares at a price range of $16 to $18, valuing its midpoint at about $1 billion, an updated filing on Jan. 18 indicated. Pricing is expected this week for the company, which will list on the Nasdaq under the symbol “CGON.”

“We intend to become a leading company in the development and commercialization of innovative therapeutics to treat cancer, with an initial focus on bladder cancer,” the filing said.

CG Oncology has already secured more than $300 million since its founding in 2010 to find solutions to bladder cancer, making it one of Orange County’s better-funded life science companies. It was only last August when the company completed a crossover Series E oversubscribed fund to raise $105 million.

Recent Success

The proposed IPO follows two good pieces of news for the company, whose lead therapy is called cretostimogene grenadenorepvec, or CG.

About 50 of the 66 evaluable patients in a Phase III trial showed no evidence of bladder cancer at any time after the administration of the CG treatment, the company revealed in interim data presented at the 24th Annual Meeting of Society of Urologic Oncology in November.

In December, the Food and Drug Administration granted both Fast Track Designation and Breakthrough Therapy Designation to CG Oncology.

“Receiving both FDA Fast Track and Breakthrough Therapy Designation is an important milestone in the development of cretostimogene grenadenorepvec and for patients with bladder cancer who urgently need more therapeutic options,” President Ambaw Bellete said in a statement.

Father Inspiration

The IPO filing revealed that its single largest investor is Hong Kong-based Simone Song, a venture capital exec and director at the company who was the head of healthcare investment banking for Greater China for Goldman Sachs.

Goldman, along with Morgan Stanley, Cantor and LifeSci Capital, are underwriting the offering. The San Diego offices of Latham & Watkins and Cooley LLP are the company’s legal teams for the IPO.

Song, who previously called the CG technology a “game changer,” will control about 9.5% of the shares, including 8.9% owned by Ori Capital, a VC fund that she co-founded in 2015.
Song credited her father for a 2004 paper on treating cancer with viruses.

“Almost two decades later, he is about to see his dream coming true,” she wrote in a December post on LinkedIn. “Our portfolio company CG Oncology just received the Breakthrough Status on Dec 5. This is on top of the great Phase 3 data announced” in November.

“It has been a hard but incredibly rewarding journey. My sincere appreciations go to my dad, the CEO & team, the board, our partners in clinical development and CMC, and fellow investors.”

Chief Executive and Chairman Arthur Kuan is a 33-year-old who has a master’s in biotechnology from John Hopkins University and was a founding member of Ally Bridge Group, a global healthcare-focused investment platform.

Kuan began his career in an operational role at Dinova Capital, a Shanghai-based, medical technology incubator fund, evaluating medical device investment opportunities. Kuan will own about 287,000 shares that will be worth about $5 million at the midpoint offering price.

Prevalent Cancer

About 725,000 people in the U.S. have bladder cancer, making it the sixth most prevalent cancer in the country. The American Cancer Society estimated about 17,000 died last year from the disease and 82,000 people annually are diagnosed with it. The average age of a patient is 73 years old, and three quarters are men.

A bladder cancer patient has limited options. Either the bladder must be removed or repaired, which has a high fatality rate, or medications are administered. Medications often have problems because the bladder, as would be expected, urinates out the anti-cancer drugs.

It’s a disease that is costly to the healthcare system because of an intense follow-up schedule for patients. Up to 50% of high-risk patients will see symptoms recur within a year.

“There is significant unmet need for treatments in these patients given the limitations of currently approved therapies and patient reluctance to undergo radical cystectomy, or the complete removal of the bladder,” the CG IPO filing said.

In contrast, CG’s “oncolytic immunotherapy” uses genetically modified viruses to target tumors in the bladder.

Last July, the company announced completion of enrollment for its BOND-003 study, which is evaluating CG in patients with high-risk non-muscle invasive bladder cancer. About 110 patients are enrolled across North America and the Asia-Pacific regions. That trial is expected to have results at the end of this year, the filing said.

As of Dec. 27, CG Oncology owns five patent families comprising five issued U.S. patents, three issued foreign patents in Japan and Singapore, three pending U.S. non-provisional patent applications, and 18 pending patent applications in jurisdictions outside of the United States.

The global bladder cancer treatment market has been forecast to be approximately $9.9 billion by 2028, the CG filing said, citing the research firm Evaluate Pharma.

CG Oncology’s competitors include some of the biggest names in pharmaceuticals, including Bristol-Myers Squibb Co., Gilead Sciences Inc., Pfizer Inc. and Merck & Co.

Cash on Hand

CG’s filing shows it has $203.7 million in cash and equivalents. It reported a net loss of $35.4 million in 2022 and $42.5 million in the first nine months of 2023. In earlier years, it collected about $25 million in research and collaboration revenue through license and collaboration agreements.

The company is based out of the 400 Spectrum Center office tower, though much of its employee base works remotely, it says. The company’s employee headcount was 61, with plans to double in the coming years.

A spokesperson said the company executives were unavailable for comment, citing quiet period restrictions during the IPO process.

In prior interviews with the Business Journal, CEO Kuan said he has a personal interest in solving cancer, having lost his father to pancreatic cancer.

“We’re looking forward to growing the company,” he said. “We are trying to save people’s lives.”

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