5 Takeways From Prime Medicine's IPO Filing

• The gene-editing biotech Prime Medicine filed on Friday to go public.
• Prime is facing an icy-cold public market. The number of biotech IPOs is down 83% from last year.
• From a key patent to an uncertain timeline, here are five takeaways from Prime's filing.

Prime Medicine is looking to be the first gene-editing biotech to go public in over a year.

The biotech, which is reportedly seeking to raise up to $200 million from an initial public offering, filed a 282-page S-1 registration form on Friday. It's unclear when Prime would actually aim to go public and start trading on the Nasdaq, under the ticker PRME. The preliminary filing does not include a pricing range for the stock or a valuation for the company.

It's a bold time for any biotech to test the public waters, but particularly one like Prime that has no near-term path to revenue, let alone profits. Prime, based in Cambridge, Massachusetts, began operations in July 2020 but publicly launched in July 2021, with $315 million in financing and a $1.2 billion valuation, according to PitchBook.

Prime is one of several companies developing an exciting but unproven technology in gene editing. Its goal is to advance prime editing, a twist on CRISPR gene editing that could allow for a wider range of edits to DNA. In an email to Insider, the company declined to comment on its IPO filing.

The market conditions are dire. There have been 18 biotech IPOs so far this year, according to BioPharma Dive. That's an 83% drop from last year, when 104 biotechs went public. The last gene-editing biotech to go public was Caribou Biosciences last July; the California biotech's shares have since fallen by about 33%.

Insider dove into Prime's S-1 filing, which provides a look at the company's current business and future ambitions. Here are five key takeaways from the filing.

1. Prime has 18 programs in the works — but they're all in very early stages.

As Prime put it in its filing, the original CRISPR system is like a pair of scissors, adept at cutting out a disease-causing gene. A newer generation of gene editing, called base editing, allows researchers to tweak a single genetic letter in our DNA as if they were using a pencil, erasing a typo in our code and writing in the fix. Prime editing, another version of next-generation gene editing, works like a word processor, "searching for the correct location and replacing or repairing a wide variety of target DNA," the filing said. The company added that this approach could repair about 90% of mutations that cause diseases.

That ambition comes through in its pipeline of drug candidates. Prime listed 18 programs in the works targeting a range of diseases in the blood, liver, eye, ear, muscle, and lungs.

But it's all still early. All 18 programs are in the discovery stages of research, meaning they're likely years away from starting initial human testing. Prime has done some mice testing for certain programs, like those targeting sickle-cell disease, but hasn't started nonhuman primate testing.

The market for biotechs is difficult, particularly so for companies that haven't started human testing. For instance, Stéphane Boissel, the CEO of the eye gene-editing biotech SparingVision, recently told Insider that an IPO was not on his company's radar until it produced human results.

"The IPO market for early-stage genomic-medicines platform, I think that window is totally closed and is going to be closed for some time," Boissel told Insider on September 12. "I think we need to wait to have some kind of clinical data validating the concept, at least for one asset, before we can consider being an IPO candidate."

2. Prime hasn't given a timeline for starting its first clinical trial – or bringing in any revenue.

Prime's filing — at least for now — doesn't specify when the biotech plans to have primate data or start human testing. Given that its lead programs are still in the discovery stages of research, it could be years before Prime actually doses a human with an experimental prime-editing therapy.

Those trials will be essential in eventually creating a medication approved by the US Food and Drug Administration, Prime's most likely path to profits. Prime's filing pointed out that drug development often takes 10 to 15 years — meaning it could be a decade or more before the company starts bringing in revenue from products.

3. Prime's cofounder David Liu owns 25% of the company.

David Liu cofounded Beam Therapeutics and Prime Medicine. Jessica Rinaldi/The Boston Globe via Getty Images

David Liu, a Harvard gene-editing scientist who co-invented base editing and prime editing, is Prime's largest shareholder. The filing indicates he owns about 25% of the company heading into the IPO. The company's other key backers are investor groups: GV owns 15%, Arch Venture Partners owns 13%, F-Prime Capital owns 13%, and Newpath Partners owns 6%.

Liu's ownership stake is a large chunk for anyone, but it is particularly hefty given that Liu isn't an executive of Prime. Instead, Prime pays Liu $150,000 a year to work as a consultant for the startup, and he serves on Prime's scientific advisory board.

"There are no current plans for Dr. Liu to be an officer or director of our company following this offering," the filing said.

Liu also cofounded the base-editing specialist Beam Therapeutics, but he held only a 9% stake in the company before it went public in early 2020.

Prime has also pledged to donate $5 million each year for 14 years to the Broad Institute, where Liu has a research lab, to support gene-editing research. Those donations started in 2021, and Liu's lab is able to use those funds.

4. A new prime-editing patent seemed to be a key catalyst for going public.

The US patent office awarded the Broad Institute a patent on September 20 that covers its methods of using prime editors. Prime has in-licensed that patent from the institute — yet another way that Prime and the institute are closely intertwined.

Given that the patent was awarded three days before Prime's S-1 became public, shoring up its intellectual property likely played a role in Prime's deciding it's ready to test the public waters.

The company described the patent as its first prime-editing patent, adding, "We believe it will be instrumental in protecting our Prime Editing platform and pipeline of gene editing programs."

That patent is set to expire in 2040. Prime said it has several more pending patents — also licensed from the institute — in the US and 42 pending patent applications outside the US.

5. Prime is effectively a research lab: 84% of its employees work in R&D, and 55% of its workforce has a doctorate or medical degree.

Shutterstock/vchal

Prime had grown to 137 full-time employees by mid-2022, with virtually all of its growth coming in the laboratory. It said that 115 employees, or about 84%, work in research and development and that 75 employees, or about 55%, hold medical degrees or doctorates.

The filing also identified five people the company is particularly reliant on: Keith Gottesdiener, its CEO; Liu and Andrew Anzalone, its cofounders; Jeremy Duffield, its chief scientific officer; and Ann Lee, its chief technical officer.