Biopharma IPO boom yields buoyant biotech public debuts
The past week has seen a smorgasbord of bigger-than-expected biopharma IPO debuts led by Chinese biotech Legend, as investors put their chips on the industry that is expected to be the ticket out of the protracted Covid-19 crisis — amid a broader market that is coming back to life with US businesses gradually reopening.
The J&J-partnered company not only emerged with one of the largest public raises in biotech history clocking in meaty $424 million, but saw its shares $LEGN soar more than 60% on its first day of trading.
Legend — which silenced skeptics such as rival Bluebird bio’s Nick Leschly by earning the partnership with J&J in an $350-million upfront deal for its CAR-T therapy — had originally filed for a healthy $350 million IPO, based on a range of $18-$20. But they managed to rake in $23 per share, setting the stage for a windfall that eclipsed mammoth raises from peers including Juno and Galapagos, but short of Moderna’s record-setting $600 million in 2018.
Legend $36.79 opening trade marks a $5.0B market cap. More valuable than bluebird ($4.4B). Three years after the famous ASCO, The Legend has surpassed the birds.
— Brad Loncar (@bradloncar) June 5, 2020
Legend’s lead experimental drug, purposed as the last line of defense for patients with relapsed and refractory multiple myeloma, is expected to be put under regulatory review in the second half of 2020.
Other biotech performances were also buoyant, either by pricing above the range or thanks to upsized offerings.
Novartis-backed Pliant Therapeutics, for instance, had penciled in a $86 million raise back in May. But that initial estimate, much like a clutch of others in recent weeks, was overshadowed with its actual haul: $144 million. It priced at the high end of its range at $16, but sized up the total shares offered to 9 million.
The South San Francisco biotech, which is allied with the Swiss drugmaker on an integrin inhibitor designed to tackle fibrosis associated with NASH on the basis of research conducted by scientific co-founder Dean Sheppard, raised $100 million ahead of the IPO in a round led by Novartis. The company’s technology, which also holds promise in fields such as oncology and muscular dystrophy, is focused on TGF-β activation. Flaunting a $577 million market cap, Pliant $PLRX finished its first day of trading up a healthy 39%.
Neighboring biotech Applied Molecular Transport also upsized its offering generating a $154 million yield, well above its initial $100 million estimate. The company, which jumped on the IPO bandwagon perhaps more out of necessity than ambition after declaring substantial doubts about its ability to continue as a going concern at the end of the first quarter, has an inflammatory-disease focused pipeline.
Its lead drug, AMT-101, is an IL-10 agonist engineered to tamp down inflammation in autoimmune disorders such as ulcerative colitis and rheumatoid arthritis. Shares of the early-stage drug developer, founded and led by life sciences consultant Tahir Mahmood, rose $AMTI 28% on its first day, granting it a respectable half a billion dollar market cap.
Finally, the debut for the first Swedish company to list on Nasdaq in 15 years also reaped gains ahead of the topline readout of its Phase III drug expected by the end of this year. The company, Calliditas Therapeutics, was initially eyeing a $75 million raise but upsized its deal to raise $90 million.
The company’s lead drug, Nefecon, is an oral formulation of the corticosteroid budesonide licensed from Uppsala University. The biotech has been developing the drug for use in an orphan autoimmune renal disease known as IgA nephropathy (IgAN). Engineered as an immunosuppressant, the drug is designed to keep patients from progressing to end-stage renal disease. Shares of the company $CALT ticked up about 1% on its first day, marking a $476 million market cap.