Are you ready for swelling biotech IPO valuations?
Alector and Gossamer Bio are set to debut on Nasdaq later this week at market caps of $1.4 billion and $1 billion respectively, marking the first biotech unicorn listings in 2019. The collective bounty they are shooting for? $406 million.
Sure, IPO trends can be short lived and the industry’s crystal balls are murky at best, but the duo are emerging from a harsh winter last December that ravaged biotech stocks across the board, with one analyst describing the mood as sinking “below disinterest toward anger.” In particular, the aftermath of Moderna’s record-breaking $604 million IPO $MRNA continues to shadow the field after watching almost a third of its market cap vanish into thin air.
Either way, both Alector and Gossamer are flush with capital to develop their early-stage assets tackling formidable disease areas — and the pair will likely set the barometer for a string of biotechs waiting in line, including Kaleido, Cirius, TCR2, Poseida and Stealth Bio (but not Alzheon).
Alector, best known for its Alzheimer’s efforts, has based its pipeline on the theory that neurodegeneration and dementia are caused by immune system dysfunction. Accelerating the immune attack or removing the brakes by focusing on genetically informed targets, it argues, offer a shot at success that’s so far eluded the amyloid beta crowd.
Insiders have reportedly agreed to pick up about half of the 9.3 million shares Alector is selling at $18 to $20 a share, translating to $176 million at the mid-point of the range. The biotech will trade as $ALEC.
Gossamer, meanwhile, is led by Faheem Hasnain and Sheila Gujrathi, the ex-Receptos execs who’ve been snapping up assets in immunology, inflammation and oncology. A biotech in a hurry, it had trotted down the rarely used fixed priced IPO route in an attempt to raise $230 million when the SEC was paralyzed by a government shutdown, only to return to its original plan about a week later.
The plan is to offer 14.4 million shares priced at $16/share under the symbol $GOSS. Existing stockholders have indicated their interest in purchasing about $100 million in shares.
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