According to a source close to the Aduro (ADRO) IPO, the company is expected to be valued at $1.25B upon hitting public markets. This is nearly 4x Advaxis’ (ADXS) value. With the craze surrounding immuno-oncology biotechs, Aduor’s valuation may be even higher after the first day of trading. Aduro is expected to go public in “early April”, which is about 2-3 weeks away.
In a recent article submitted on TheStreet.com, I discussed the similarities between Aduro and Advaxis. Both companies utilize Listeria-based immunotherapies to trick the immune system into thinking it is attacking bacterial infection rather than the actual cancer cells. The approaches are so close, in fact, that the two companies have engaged in patent disputes. The European Patent Office sided with Advaxis.
So, why is Aduro perceived to be 4x more valuable than Advaxis? Simple answer is that Aduro signed two separate deals with Johnson & Johnson subsidiary Janssen (read more here). In these deals, Aduro received aggregate upfront payments of nearly $50M and a total of $1.1B contingent on future milestones.
Advaxis has formed its own big pharma collaborations with Merck and MedImmune, an arm of AstraZeneca. However, Advaxis has given up the conventional financial incentives (upfront + contingent payments) for sole discretion of their compound and the flexibility to negotiate potential agreements down the road.
This, however, does not mean that Advaxis isn’t as great of an investment. The company has numerous candidates across all clinical phases and targeting a wide array of indications.
In my opinion, Advaxis is missing the exposure that other immunotherapy biotechs are receiving. This has resulted in Advaxis’ misevaluation. With Aduro’s IPO though, this should change as anyone looking at Aduro will come across Advaxis due to their proximities. As more analysts pickup coverage on Advaxis and word spreads, I believe the company will narrow the valuation gap with other billion dollar immunotherapies. Aduro’s IPO will wind up being a near term catalyst for the only other Listeria-based immunotherapy.