Neurona Therapeutics, a San Francisco-based drug developer, sees a path toward an IPO following its latest funding round, said co-founder and CEO Cory Nicholas.

The company has raised USD 285m in funding and USD 15m in non-dilutive funding, he said. In February, Neurona raised USD 120m in a funding round co-led by Viking Global Investors and Cormorant Asset Management.

The Series E round that closed last month could be considered its crossover funding round ahead of an initial public offering, Nicholas said. The latest round of funding gives the company flexibility for its next strategic step, and now given its capital position, Neurona will not be forced into pursuing an IPO until it is ready and market conditions are favorable, Nicholas explained.

Neurona is focused on developing treatments for neurological disorders by advancing regenerative cell therapy candidates, according to the company.

Its lead candidate, NRTX-1001, is in a Phase 1/2 clinical trial for the treatment of drug-resistant mesial temporal lobe epilepsy (MTLE), according to the company. It also has potential application in Alzheimer’s disease and other disorders of the nervous system. The company aims to start the Phase 2 trial for Alzheimer’s in mid-2025, which will consist of a 30-patient trial, Nicholas said.

Before pursuing an IPO, Neurona wants to gather additional clinical data from its ongoing and upcoming trials, he said. Also, the company will want further clarity from the US Food and Drug Administration to better understand its path to an FDA approval of its lead candidate, he explained.

Neurona maintains dialogue with investment bankers to build relationships and share its story, Nicholas said. Approaches from bankers eager to learn more about Neurona and its plans are welcome, he said.

Nicholas pointed to cell therapy company, Kyverna Therapeutics, which announced last month that it plans to IPO, as a relevant, recent, comparable deal to Neurona. Nicholas is hopeful this recent offering is a preview of additional successful IPOs to come, he said.

Neurona could pursue another funding round if needed, Nicholas said. Additionally, the company has access to non-dilutive funding options as well that it could tap.

Neurona is engaging in discussions at various stages with strategics about partnerships and business development opportunities, Nicholas said. The company is receptive to M&A and partnership approaches from strategics to discuss options; however, Neurona is focused on executing on its strategy of advancing its indications in the clinic and “the rest will take care of itself,” he said.

Potential suitors for Neurona could include those focused on central nervous systems (CNS), regenerative cell therapy players, or pharmaceutical companies already in epilepsy or those looking to enter the market, Nicholas explained.

Nicholas pointed to two acquisitions as potentially comparable deals in the space. Bayer AG [FRA:BAYN] acquired BlueRock Therapeutics, a regenerative medicine company, for up to USD 600m and Vertex Pharmaceuticals [NASDAQ:VRTX] acquired Semma Therapeutics, a developer of regenerative medicine therapy for Type 1 Diabetes, for USD 950m.

Wilson Sonsini serves as its legal counsel.