Six biopharmas are raising more than a half-billion dollars gross this week through initial public offerings, five of which are planned for today—a sign that the IPO market remains robust, at least for now.
The six are among 28 U.S. biopharmas that have launched IPOs this year, according to Brad Loncar, CEO of Loncar Investments, who tracks developments in cancer immunotherapy and the broader biopharma industry.
Thirteen of those 28 IPO companies have seen their stock prices rise above their initial offering price, according to Loncar’s blog. The top performer among 2018 IPOs is Armo Biosciences, which closed yesterday at $49.97, nearly triple its IPO price of $17 per share. On May 10, Eli Lilly said it plans to acquire Armo for approximately $1.6 billion, in a deal designed to build the buyer’s immuno-oncology pipeline with a Phase III pancreatic cancer candidate that is also being developed to treat other solid tumors.
A key reason for the IPO boom is investor worry about the outcome of the midterm U.S. Congressional elections in November, Bloomberg biopharma and healthcare columnist Max Nisen wrote on Monday: “With the U.S. midterms looming, it may be better to get in now than run the risk that a return of anti-drug pricing rhetoric or a negatively perceived election result creates a more volatile market that’s inhospitable to IPOs.”
“Eventually, clinical trials and the market will render a verdict on this IPO class. But as it stands now, the burst of offerings doesn’t appear to portend a bubble,” Nisen observed.
Five of the six announced pricing for their IPOs last night, garnering a combined $463.1 million in gross proceeds for their new shares when they begin trading today:
Aptinyx (Evanston, IL), a developer of small molecule drugs for brain and nervous system disorders, plans to raise at least $102.4 million in gross proceeds through the sale of 6.4 million shares at $16 per share. The company has granted its underwriters a 30-day option to purchase 959,999 additional shares of common stock at the IPO, less underwriting discounts and commissions, which would increase the gross proceeds to about $117.8 million. Aptinyx shares will trade on The Nasdaq Global Select Market under the ticker symbol “APTX.”
Aptinyx has generated numerous small-molecule modulators of N-methyl-D-aspartate (NMDA) receptors through its proprietary platform. Furthest along of these candidates is NYX-2925, which is designed to work by enhancing synaptic plasticity. NYX-2925 is in Phase II studies for painful diabetic peripheral neuropathy (NCT03219320) and fibromyalgia (NCT03249103).
Looking to Cure Fabry Disease
Avrobio (Cambridge, MA), a rare disease gene therapy developer, is collecting $99.7 million by selling 5,247,958 shares at $19 per share. Those gross proceeds could rise to $114.7 million if underwriters exercise in full their 30-day option to purchase up to 787,193 additional shares at the IPO price, less underwriting discounts and commissions. Avrobio shares will trade on The Nasdaq Global Select Market under the ticker symbol “AVRO.”
Avrobio specializes in lentiviral-based gene therapies for rare diseases. The company’s lead candidate is AVR-RD-01, single-dose therapy with potential to be a life-long cure for patients with Fabry disease. AVR-RD-01 is under study in a Phase I/II trial (NCT03454893) that was recruiting patients as of March 19. In February, the company announced it would advance AVR-RD-01 and three other gene therapies with proceeds from a $60 million Series B financing.
Kezar Life Sciences (South San Francisco, CA), a developer of small molecule therapeutics focusing on unmet needs in autoimmunity and cancer, said it will raise at least about $75 million gross through the sale of 5 million shares at $15 per share. Kezar has granted its underwriters a 30-day option to purchase up to 750,000 additional shares of common stock at the IPO price, less underwriting discounts and commissions, which would bring gross proceeds up to $86.25 million. Kear shares will begin trading on The Nasdaq Global Select Market under the symbol “KZR.”
Kezar's lead product candidate is KZR-616, a first-in-class selective inhibitor of the immunoproteasome that is now enrolling patients in a Phase Ib/II trial in systemic lupus erythematosus and lupus nephritis (NCT03393013). Kezar says it anticipates Phase Ib initial topline data in the first half of 2019, and Phase II topline data in the first half of 2020.
Magenta Therapeutics (Cambridge, MA)—a developer of therapeutics designed to revolutionize bone marrow transplants for patients with autoimmune diseases, blood cancers and genetic diseases—plans to raise $100 million in gross proceeds through the sale of 6,666,667 shares at $15 per share. Underwriters have a 30-day option to purchase up to 1 million additional shares of common stock at the IPO price less underwriting discounts and commissions, which would bring gross proceeds up to $115 million. Shares will start trading on the Nasdaq Global Market under the symbol “MGTA.”
Magenta has focused on developing methods that allow expansion of stem cells, and maintain the ability of the cells to be transplanted—methods that the company believes may improve the outcomes of stem cell-based therapies. The company’s most advanced clinical-stage program, MGTA-456, is being investigated in a variety of transplant settings—including in a Phase II trial (NCT03406962) designed to assess the safety and efficacy of using the therapy in patients with inherited metabolic disorders who are undergoing stem cell transplantation.
Glucagon ‘Rescue Pen”
Xeris Pharmaceuticals (Chicago), a developer of ready-to-use, room-temperature stable injectable and infusible drug formulations, plans to sell 5.7 million shares at $15 per share, for gross proceeds of $85.5 million. Xeris’ IPO underwriters have also been granted a 30-day option to sell up to an additional 855,000 shares at the IPO price, which would result in gross proceeds of more than $98.3 million. Shares will begin trading on The NASDAQ Global Select Market under the ticker symbol “XERS.”
Xeris’ lead candidate is G-Pen™, a glucagon “rescue pen” indicated for patients with severe hypoglycemia. The auto-injector pen, which is designed to apply Xeris’ patented XeriSol™ technology, contains ready-to-use, room-temperature–stable, liquid glucagon, now in a Phase III study (NCT03439072) comparing it to Eli Lilly’s Lilly Glucagon (Glucagon for Injection [RDNA Origin]) in patients with Type 1 diabetes.
A sixth company, Eidos Therapeutics (San Francisco), raised approximately $106.3 million in gross proceeds yesterday with an IPO of 6.25 million shares sold at $17 per share. Gross proceeds could rise to $122.2 million if underwriters exercise in full their 30-day option to purchase up to an additional 937,500 shares at the IPO price. Shares began trading on the Nasdaq Global Select Market under the ticker symbol “EIDX.”
Eidos is advancing an oral small molecule treatment AG10, designed to halt the progression of diseases caused by transthyretin (TTR) amyloidosis (ATTR). Last month Eidos disclosed dosing of the first patient in a Phase II trial of AG10 designed to assess safety and efficacy in patients with ATTR cardiomyopathy (NCT03458130). The company expects to report topline results from the trial by the end of 2018, as well as launch a second Phase II trial in patients with ATTR polyneuropathy later this year.
In April, Eidos completed a $64 million Series B financing, with proceeds intended for advancing AG10 into Phase II trials, as well as continuing preparations for future Phase III trials.