Denali Therapeutics’ team plans to break through a lot of barriers in biotech — most notably looking to develop a drug for Alzheimer’s that actually works after 15 years of failure in the industry. This week, they settled for breaking the 2017 record for initial market valuation during a biotech IPO.
The South San Francisco-based biotech — based in Oyster Point close to Genentech, where several of the executive team came from — raised $250 million after pricing shares at $18, right in the middle of the range. And that gives the very early-stage biotech a market valuation of $1.7 billion, passing a top mark that had been held by Ablynx, which started out at $1.3 billion.
Denali, helmed by Ryan Watts, will trade as $DNLI.
The biotech was one of the darlings of the venture community, raising $350 million while setting out to take a fresh approach in neurodegeneration by going after targets like RIP1, ApoE and LRRK2.
“This may sound like Drug 101,” CMO (and Genentech vet) Carole Ho told me last year, but Denali’s success after so many failures will get down to its ability to engage the target, with the right kind of biomarkers in place to track their success. Developing biomarkers early, she adds, is critical. And the biology of these diseases is becoming more clear through the rapid advance of genetics research.
Denali’s arrival on Nasdaq marks the 40th US biotech IPO of the year, outstripping most of the expert guesses that the industry would repeat or just edge out last year’s lean 28 biotech IPOs. And while it’s no repeat of 2014, when Wall Street rarely failed to embrace any biotech looking to go public, the second half of 2017 has seen a fast clip of new offerings.
Bruce Booth at Atlas was particularly impressed by the numbers for a Phase I biotech.
$DNLI IPO metrics. At offer of $18/share, its a 4.5x return on the Series A shares bought in 2015/2016 for $4.00/share.
— Bruce Booth (@LifeSciVC) December 8, 2017
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