Cingulate Therapeutics (CING) IPO Downsized Before Listing Date

In Sept. 2021, Cingulate Therapeutics filed for its IPO. Now, the Cingulate IPO has been downsized just before the listing. The company plans to list its shares on the Nasdaq under the ticker symbol “CING”. What’s CING’s forecast, and should you buy the stock?

Founded in 2013, Cingulate is a clinical-stage biopharmaceutical company. The company uses its proprietary Precision Timed Release (PTR) drug delivery platform technology to treat patients with attention deficit and hyperactivity disorder (ADHD).

Cingulate is expected to start trading on Oct. 15. The company now plans to raise $40 million by offering 4.4 million shares for $8–$10. Previously, Cingulate planned to offer 4.5 million shares for $10–$12. The net proceeds from the offering will be used for research and development activities, working capital, and general corporate purposes.

Oppenheimer, Ladenburg Thalmann, and Brookline Capital Markets are the IPO's joint book-running managers. The underwriters have the option to purchase an additional 0.7 million shares at the IPO price.

Cingulate's two pipeline candidates, CTx-1301 (dexmethylphenidate) and CTx-1302 (dextroamphetamine), are currently being developed to treat patients with ADHD. In Oct. 2020, the company announced promising results from a phase 1/2 study of CTx-1301 in ADHD patients, and it expects to begin phase 3 trials in the fourth quarter of 2021, with results due in late 2022. In addition, the company intends to start a phase 1/2 bioavailability trial for CTx-1302 in ADHD patients in early 2023.

In the filing, Cingulate noted that over 70 million ADHD medication prescriptions were written in 2020. The global market for the treatment of ADHD, valued at an estimated $16.4 billion in 2018, is set to reach $25 billion in value by 2025, according to Grand View Research.

Cingulate reported a net loss of $7.2 million in 2020, compared with a net loss of $11.5 million in 2019. The company doesn’t generate any revenue yet.

According to the company's prospectus, what distinguishes Cingulate's product from those supplied by competitors is that it slowly releases medication throughout the day, while other medications take effect instantly and cause a crash later. The company added that this feature would help reduce costs and avoid short-term stimulant misuse by individuals prescribed ADHD medicines.

Cingulate anticipates that the net proceeds from this offering, along with its existing cash, will be sufficient to support the company’s operations for at least a year, including the completion of its planned clinical studies for CTx-1301 and CTx-1302, as well as the filing of the NDA for CTx-1301.

Cingulate is seeking a valuation of about $225 million in its IPO. In comparison, Aytu BioPharma has a market capitalization of $72 million. Cingulate is one of the few biotech companies attempting to repurpose existing, approved treatments with new and improved drug release technologies. While the study appears to be promising, we haven’t yet seen a breakthrough success for companies pursuing this business model.

Cingulate shares will be available to buy through any traditional or online discount broker, including Robinhood.