Jounce’s Cinderella story now includes a $102M IPO chapter

Rich Murray, CEO Jounce Therapeutics

Every up-and-coming biotech in the industry likes to dream about doing that one big, transformational deal that brings the spotlight and some rock star market appeal. And Jounce pulled one off last summer, getting a richly front-ended $2.6 billion partnership with Celgene that helped them stand out from the immuno-oncology crowd — not so easy to do these days.

On Thursday, Cambridge, MA-based Jounce Therapeutics completed the second chapter of its Cinderella story, breaking past the range and raising $102 million – well above its initial $75 million marker – from an IPO. The biotech sold 6.36 million shares at $16 a share and will trade as JNCE. The underwriters have an option on about a million more shares.

Coming on top of two early IPOs that managed to hold to the mid point of their range, and we’re getting off to a brisk start of the IPO year. One sour note occurred for Geneva-based ObsEva $OBSV, though, which saw its shares debut under the initial $15 price. For several years now, biotechs have relied heavily on insiders to help hold the line on pricing. Analysts generally expect biotech will outperform a lackluster 2016, with 28 biotech IPOs. But it likely won’t get close to the 66 that hit in 2014.

Celgene’s deal came with a high five from CSO Rob Hershberg, who said that “the quality of the science and the people (at Jounce) is really good.”

That helped them decide to come in on its third big I/O pact behind Agios and Juno.

Now at the Phase I/II stage of development, Jounce was launched by Third Rock and gained attention for an immuno-oncology strategy that is involved in amping up an immune system attack on cancer — a strategy that initially never panned out for a roster of biotechs. The lead drug says a lot about Jounce. It’s focused on ICOS, AKA the Inducible T cell CO-Stimulator, a protein on the surface of T cells Jounce believes can spur an immune response against a patient’s cancer.  Immuno-oncology has been at the crossroads of a multitude of deals over the past three years, and Celgene clearly wants to be in the front end of the second wave — what Jounce CEO Rich Murray calls immuno-oncology 2.0 — after Bristol-Myers and Merck led the way with Opdivo and Keytruda for checkpoint inhibition.

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