A tale of two IPOs (plus one): Cabaletta prices well below range for $75M while Phathom bags $182M
When Cabaletta Bio and Phathom Pharmaceuticals penciled in $100 million IPOs alongside 4D Molecular Therapeutics back in the beginning of October, they appeared to be riding on a wave of positive sentiments in the public markets — albeit against some chatter in the background about how long the buoyant conditions will last.
The answers turned out to be different for each of these biotechs. Late Thursday, Cabaletta, a University of Pennsylvania spinout, raised $75 million despite upsizing its offering to 6.8 million shares, while Phathom’s gross proceeds from selling more than 9.6 million shares registered at $182 million.
The underwhelming debuts of several biotech unicorns have underscored the uncertainty clouding recent listings, from BioNTech raising about $100 million less than originally intended to Vir pricing at the low end of the range. Before that, ADC Therapeutics pulled out its plans entirely citing adverse circumstances.
But Cabaletta’s case could seem even more serious. After setting terms in the $14 to $16 range, it ended up pricing at $11.
Its pitch centered around CAAR-Ts — chimeric autoantibody receptors — pronounced “double-A CAR-T” and their potential to take out pathogenic B cells while sparing healthy ones. That tech, being steered to the clinic by a star-studded team of founders and execs, had won the company $88 million in private funding from 5AM Ventures, Adage Capital, Baker Bros, Boxer Capital and Deerfield.
Its first clinical trial is expected to begin in 2020, targeting a rare skin disorder called mucosal pemphigus vulgaris.
Meanwhile Phathom’s launch price of $19 was in the middle of its range of $18 to $20, gaining more firepower to complete Phase III trials for vonoprazan, a drug that blocks the potassium-binding site of gastric hydrogen potassium ATPase (also known as the proton pump), which is the enzyme largely responsible for acidification of the stomach. Already approved in Japan, it is being tested for erosive esophagitis and H. pylori infection.
The proceeds will also propel a gastrointestinal pipeline from Takeda, a process that Frazier played a crucial role in.
TFF Pharma’s public listing comes across as much more straightforward as the Austin-based lung disease biotech set the price at $5 when it filed for the $22 million IPO in August. Led by Glenn Mattes, the company is developing dry powder inhaler versions of pulmonary drugs generated with its namesake Thin Film Freezing technology.