Blocking proteins that drive inflammation is a tried and true way of treating immunological disorders, but Lycia Therapeutics contends its approach of eliminating these proteins could be better. The biotech now has $317.5 million in IPO cash for clinical trials that could start building the case to prove it.
Food allergy is Lycia’s lead indication, where the company’s technology could offer an alternative to a blockbuster Roche product that is currently the only FDA-approved biologic drug option. Lycia’s lead program is in Phase 1 testing and another food allergy drug candidate is on track to reach the clinic.
Investor interest in Lycia enabled the biotech to boost its IPO’s size by more than 2.9 million shares. The South San Francisco-based company ended up offering 17.64 million shares priced at $18 each, which was the top of the planned price range. After debuting on the Nasdaq on Friday under the stock symbol “LYCA,” Lycia’s stock price saw some pop, reaching as high as $36.49. Lycia finished its first day as a public company trading at $30 per share, up more than 66% from the IPO price.
Lycia’s drugs leverage a built-in cellular mechanism for disposing of old or damaged proteins, using this system to eliminate disease-driving proteins. It’s an approach that was first tried in oncology. Earlier this year, the first targeted protein degrader won FDA approval for breast cancer. Industry R&D efforts are underway to expand protein degradation to immunology, but like the degraders for cancer, they mainly addresses proteins inside a cell.
Proteins found outside of a cell or on the cellular membrane can also cause disease, but they’re out of reach of the cell’s protein-degrading machinery. Lycia addresses them with its lysosomal targeting chimeras (LYTACs), which bind target proteins and shuttle them into the cell. There, the proteins are delivered to the lysosome, a cellular component that degrades proteins.
Lycia initially used its platform technology to creates LYTACS that employ antibodies. The company later expanded its approach to include using bispecific antibodies and small molecules.
“We believe we have significant opportunities across autoimmune, inflammatory and allergic diseases to develop therapies targeting well-validated extracellular disease drivers where selective protein degradation may deliver therapeutic benefits exceeding current and emerging treatments,” Lycia said in the IPO filing.
Stage Set for a Food (Allergy) Fight
Lead program LCA-0061 is an antibody-small molecule conjugate designed to target and degrade immunoglobulin E (IgE), an antibody produced by the immune system that contributes to allergic responses, including food allergy. That target is already addressed by the Roche antibody drug Xolair, which was Initially approved in 2003 for asthma. While Xolair is an older drug with expired patents, the 2024 addition of food allergy to its label is contributing to the product’s continued revenue growth. Roche markets the drug in the U.S. while Novartis holds its rights in the rest of the world. In third quarter 2026 financial results released last week, Roche reported 2.5 billion Swiss francs (about $3 billion) in Xolair sales in the first nine months of this year, a 20% increase compared to the same period in 2025.
Still, Lycia notes that Xolair’s blocking of IgE does not eliminate the protein. The biotech also claims the shortcomings of IgE-blocking drugs include weight-based dosing and limited applicability to patients who have high baseline IgE levels.
Lycia says its molecules are able to cycle in and out of a cell multiple times to degrade multiple IgE proteins. This capability could enable deep and durable depletion of the target, supporting its use in those with high baseline IgE levels, the company said in the filing. Preliminary results from a Phase 1 test in participants with elevated IgE levels showed an average maximum IgE reduction of 96% from baseline, according to the filing. Furthermore, most participants maintained greater than 95% reduction in IgE from baseline measured at 28 days post-dose. Lycia expects to report more Phase 1 data in 2027.
A second program called LCA-0062 is a follow-on to the first Lycia food allergy drug. This LYTAC is a bispecific antibody degrader designed to offer additional flexibility in dosing and duration of response, which the company said could offer differentiated activity in treating food allergy. It could also support potential expansion of the drug to other diseases mediated by IgE. LCA-0062 is being readied for an investigational new drug application. Lycia plans to start a Phase 1 study next year; preliminary data could be reported in the second half of the year.
A third program, LCA-0321, is a protein-small molecule conjugate in development for Graves’ disease, which develops as the immune system produces antibodies that attack the thyroid gland. LCA-0321 is designed to degrade TRAbs, the pathogenic antibodies that drive this chronic condition. A Phase 1 study is underway in Graves’ patients; preliminary data are expected next year.
Stanford Roots, Nobel Prize-Winning Science
Lycia formed in 2019 based on the research of Carolyn Bertozzi, a Stanford University professor who received the Nobel Prize in Chemistry in 2022 for her work in biorthogonal chemistry. Bertozzi and her team discovered and characterized the molecules now called LYTACs. Lycia incubated within a discovery engine of Versant Ventures, the startup’s founding investor. It is led by CEO Aetna Wun Trombley, whose experience includes serving as the chief operating officer of NGM Biopharmaceuticals.
In 2021, Eli Lilly paid Lycia $35 million to begin a partnership focused on developing up to five degrader drugs for undisclosed targets. Lilly terminated the alliance this past February and no milestone payments were made, according to the filing. But Lycia said it believes its approach to degradation could apply beyond the company’s areas of therapeutic focus and it may pursue other collaborations.
In its history as a private company, Lycia said it had raised $266.6 million, most recently a $75 million Series D round in June. Versant Ventures was the largest shareholder with an 18.9% stake in Lycia before the IPO followed by the 12.8% stake of Venrock. As of the end of June, Lycia reported its cash position was $148.1 million.
Following the IPO, Lycia plans to spend about $80 million on LCA-0061 and $70 million on LCA-0062, bringing both programs through planned Phase 2 trials. Another $90 million is budgeted for bringing the Graves’ disease program through Phase 2 testing. Lycia estimates its capital will last into the second half of 2029.
Photo: Angela Weiss/AFP, via Getty Images
