The crossover round is alive and well. Just a few days after Dermira put out the word that a consortium of backers had come up with a $51 million C round, the company rolled out a $75 million IPO. And the news, along with a fresh, $86 million filing from Rhythm Pharmaceuticals, helps set the stage for a new round of fall biotech IPOs that will once again test investors' appetite for risk.
First, let's look at Redwood City, CA-based Dermira. Focused on skin ailments, the biotech is partnered with UCB on the development of Cimzia--already on the market--for psoriasis, a field that will soon be packed with a host of contenders from the likes of Novartis ($NVS) and Eli Lilly ($LLY). The biotech has laid plans for a Phase III psoriasis trial in 2015 as it pursues further work on a new therapy for "hyperhidrosis," or excessive sweating, in the armpits. It's in a Phase IIb study and a successful outcome would set the stage for a late-stage program. There's also an acne treatment in early mid-stage studies.