The strongest performer among companies going public since 2010 is cancer drug developer Aveo Pharmaceuticals. It closed trading around $16.79 as of December 27, up about 84% from its March 2010 IPO price of $9. Its lead candidate, tivozanib, is now in a Phase III advanced renal cell carcinoma program.
Two companies that began trading last month have also seen success thus far: Clovis Oncology and NewLink Genetics. Clovis saw its per-share stock price zoom from the low end of its estimated IPO price range of $13 per share to $14.82 before settling at $13.96 as of December 27. The company raised $130 million in its IPO on November 15.
Four days earlier NewLink Genetics raised $43 million by selling 6.2 million shares at $7 per share; it had sought a $10–$12 range. The developer of immunotherapies for oncology has seen its price fluctuate between $6.25 and $7.81 a share.
While Aveo’s success, like that of Clovis and NewLink, might steer some investors to cancer drug companies, the specialty of a company is less a predictor of success for public biopharmas than their ability to advance a product through the clinic, Mike Carusi, general partner with Advanced Technology Ventures, told GEN.
“By and large, they are going to be product companies, and if they have a product in the pipeline, what stage is it? If it’s in Phase III or in some cases marketed, then they’ll be able to garner a much higher valuation,” Carusi noted.
He cited another strong performer among recently public companies, Ironwood Pharmaceuticals. The company’s shares were at roughly $12.03 as of December 27, about 7.4% above the IPO price of $11.20 in February 2010. Carusi said Ironwood has fared better than most of the 2010 IPOs because it was a more established company with a promising product in later stages of reviews: “They could go public in any market.”
Ironwood expects an FDA decision on its oral peptide-based medication, linaclotide, for irritable bowel syndrome with constipation (IBS-C) and chronic constipation by June 2012. An MAA was submitted by its European partner, Almirall, this September. Decision Resources predicted that the peptide will achieve blockbuster sales by 2018, and emerge as a market leader for IBS by 2020.
“What it takes in biotech is something that is more mature, and there just aren’t many companies like that,” Carusi said.
Other examples of successful biopharmas that went the IPO route: Aegerion Pharmaceuticals, Trius Therapeutics, and Sagent Pharmaceuticals. Aegerion, developer of treatments for rare genetic lipid disorders, was trading around $16.52 on December 27, up about 73% from its initial offering share price of $9.50 in October 2010. Aegerion has an ongoing Phase III trial with its candidate for homozygous familial hypercholesterolemia, lomitapide.
Trius Therapeutics, which makes antibiotics, was 35% higher as of this Tuesday at about $7.21 compared to its August 2010 IPO price of $5. On December 19 the company reported positive Phase III results for its lead molecule, tedizolid phosphate (TR-701), as a treatment for acute bacterial skin and skin structure infections.
Shares of Sagent, an injectable-drug developer, were trading at approximately $21.57 on December 27, up about 38% from the $16 IPO price when it launched in April 2011. Sagent said last month that it was focused on launching 40 generic drugs, represented by 75 ANDAs either recently approved or pending FDA approval.