Altus launches IPO at $14-$16 per share; pricing slated for week of Jan. 23 via Merrill, Morgan

By Ronda Fears

Nashville, Jan. 11 - Altus Pharmaceuticals, Inc. on Wednesday launched its initial public offering of 6 million shares with a price range of $14 to $16 per share. Pricing is slated for the week of Jan. 23 via joint bookrunners Merrill Lynch & Co. and Morgan Stanley.

SG Cowen & Co. is a co-manager.

Cambridge, Mass.-based Altus, a subsidiary of Vertex Pharmaceuticals, Inc. until 1999, is focused on the development and commercialization of oral and injectable protein therapeutics for chronic gastrointestinal and metabolic disorders.

Vertex will reduce its equity stake in Altus to 12.7% from 17.4% through the IPO. Altus' largest pre-IPO shareholder, Warburg Pincus Private Equity VIII LP, will cut its stake to 20.8% from 29.3%.

Post-IPO, there will be roughly 20 million shares of Altus stock outstanding.

IPO proceeds, estimated at $90 million at the midpoint of price talk, are slated for drug development and general corporate purposes.

At Sept. 30, Altus said its accumulated deficit was $112.1 million.

In the IPO prospectus filed at the Securities and Exchange Commission, the company said it expects to continue to incur losses for at least the next several years, as it has only been able to generate limited amounts of revenue from license and milestone payments under collaboration agreements, payments for funded research and development and products it no longer sells.

Altus has no product approved for commercial sale and anticipates operating losses will increase over the next several years as it advances its lead candidates, ALTU-135, ALTU-238 and others. ALTU-135 has successfully completed a phase 2 clinical trial in cystic fibrosis patients for the treatment of malabsorption due to exocrine pancreatic insufficiency. ALTU-238 is currently in a phase 2 clinical trial in adults for the treatment of growth hormone deficiency.

The stock is proposed to be listed on the Nasdaq Stock Exchange under the ticker "ALTU."

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