Lycia Therapeutics, Inc. 424B4final IPO prospectus

Executive Summary

Lycia Therapeutics develops protein-degrading medicines for patients with allergic and autoimmune diseases; its revenue has come from research collaboration, not product sales. It is advancing two IgE-targeting candidates and a Graves’ disease treatment, seeking early human evidence that removing disease-causing proteins can outperform blocking them. Its sole collaboration has ended, and despite restructuring-driven savings, H1 2026 net loss was $(19.2)M. The all-primary IPO raises $318M gross at an implied $991M market capitalization, giving IPO buyers 32% ownership. Buyers are funding an unproven therapeutic platform whose promising biomarker results must translate into patient benefit, with further financing needed before approval.

Business Model and Growth Drivers

Lycia’s lysosomal targeting chimeras, called LYTACs, connect disease-causing proteins outside cells to receptors that carry them into cellular disposal compartments. Its recyclable cataLYTAC format is designed to remove multiple target molecules, rather than being destroyed alongside each target. The commercial proposition is deeper, longer-lasting protein depletion with potentially less frequent dosing. None of its candidates is approved.

• LCA-0061: In one small Phase 1 cohort of healthy atopic participants, a single dose produced a mean maximum 96% IgE reduction; most remained more than 95% below baseline at Day 28. No safety signals or dose-limiting toxicities were reported. This demonstrates preliminary biological activity, not food-allergy efficacy. Additional healthy-participant and food-allergy patient data are expected in 2027.
• LCA-0062: A fully biologic IgE degrader undergoing studies needed before human testing. Management believes it could offer longer suppression and simpler manufacturing; initial Phase 1 data are expected in H2 2027, subject to regulatory clearance.
• LCA-0321: A Phase 1 Graves’ disease candidate designed to remove disease-driving autoantibodies while preserving protective antibodies. Initial patient data are expected in 2027.

Food allergy offers established demand: more than 100,000 U.S. patients had been prescribed Xolair by 2025. Lycia seeks differentiation through sustained IgE depletion, including for patients with high baseline IgE. In Graves’ disease, its proposed advantage is treating the autoimmune driver rather than suppressing hormone production or destroying thyroid tissue.

All historical revenue came from Lilly. Its termination became effective on 2/12/2026, eliminating that revenue source and associated milestone and royalty opportunity. Lycia had 31 employees at 6/30/2026 and outsources manufacturing, making contractors essential to execution.

The Offering

• Size and implied valuation: 17.64M new shares at $18.00 raise $318M gross. Using the offering’s 55,034,559 post-IPO shares gives $991M market capitalization, 32% ownership for IPO buyers and 147× FY2025 revenue. Including outstanding and subsequently granted options gives 59,744,393 shares and $1.08B capitalization before exercise proceeds; IPO buyers’ stake falls to 30%. Unallocated plan reserves are additional potential dilution.
• Proceeds and option: All proceeds go to Lycia, with estimated net proceeds of ≈$291M. A 30-day option covers another 2.65M shares; full exercise raises gross proceeds to $365M and estimated net proceeds to ≈$335M.
• Deployment: Together with existing funds, ≈$80M is allocated to LCA-0061, ≈$70M to LCA-0062 and ≈$90M to LCA-0321, each through substantially its planned Phase 2 trial. Remaining funds support research and operations; none of these programs is funded through approval.
• Asset backing: Each $18.00 share is backed by $7.92 of net tangible assets after the IPO, a $10.08 gap. Existing investors paid $7.43 per share on average.
• Timing and distribution: Final prospectus dated 10/22/2026; delivery expected on or about 10/26/2026. Listing: Nasdaq Global Select Market, LYCA. Underwriters include Jefferies, TD Securities, Evercore, Guggenheim and LifeSci Capital.
• Resale supply: Substantially all existing holders face 180-day restrictions ending 4/20/2027, subject to exceptions and discretionary early release. Up to 37.4M pre-offering shares could subsequently become eligible for sale.

Key Financial Highlights

Dollar amounts in millions. Annual balance sheets are fiscal year-end; H1 balance sheets are at 6/30. “After IPO” assumes preferred-stock conversion and the base offering, net of offering costs.

• Equity bridge: Before the IPO, $277M of convertible preferred stock sits outside stockholders’ equity, while accumulated losses total $137M. Conversion moves preferred capital into equity, producing $145M before offering proceeds; the offering then adds ≈$291M. The negative historical equity is therefore not a measure of borrowing.
• Cost trajectory: The June 2025 reorganization cut workforce by ≈42%. Management expects spending to rise again as trials advance.
• Runway: Management expects resources to last into H2 2029, but additional capital will be required. Preliminary, unaudited liquid resources were ≈$138M at 9/30/2026.

Governance and Control

• Voting: One common share carries one vote. The five largest listed holders own 42% after the offering; Versant leads at 13%, giving institutions substantial influence without dual-class voting.
• Board: Three of four directors are expected to be independent. A staggered board and restrictions on stockholder action make an unsolicited takeover harder.
• Equity incentives: The new equity plan reserves 6.02M shares and the employee purchase plan 0.550M; annual increases create ongoing dilution potential.
• Reporting: Emerging-growth-company exemptions include no auditor attestation of internal controls while eligible, reducing independent assurance.

Risk Assessment

• Clinical and platform validation: No LYTAC therapy is approved; a shared-platform safety or efficacy failure could impair several programs.
• Manufacturing concentration: Lycia lacks redundant bulk-drug supply and Phase 3 or commercial arrangements, while dependence on WuXi providers exposes trials to supplier and geopolitical disruption.
• Financing: IPO resources do not cover approval, so unfavorable clinical results could force dilutive financing or program cuts.
• Competitive differentiation: IgE depletion must demonstrate patient benefit, durability and convenience against Xolair, not merely superior biomarker readings.
• Valuation: The implied 147× revenue multiple uses an ended collaboration, making valuation dependent on future clinical and commercial success rather than current earnings.
• Resale overhang: The 4/20/2027 lock-up expiry could release substantially more shares than the IPO sold, pressuring trading prices.

What to Watch

• LCA-0061’s 2027 data: Sustained depletion must extend into food-allergy patients with acceptable safety; weak patient benefit would undermine its differentiation.
• Platform breadth: LCA-0321 patient data and LCA-0062’s planned H2 2027 results would support expansion beyond the first cohort; delays or inconsistent activity would narrow the case.
• Spending and runway: Future filings should show Phase 2 progress within the stated allocations; faster cash consumption without corresponding progress would weaken the H2 2029 runway claim.