Nasdaq triple IPO play brings in $345M as the big biotech party rocks on

After Entasis Therapeutics $ETTX hit the floor on Nasdaq Wednesday after pricing its offering below the range, the stock cratered fast, plunging 29% and likely causing a few frowns among the rest of the biotechs in the queue for an IPO. But overnight we saw three more drug developers go public, playing inside the range and raising a collective $345 million.

No doubt, the action at the Nasdaq casino last night will bring in more punters looking to cash in on the big wave of biotech IPOs for 2018 — many without even a first round of human data to look at — as the industry looks to see how many small outfits can steer their way into the public market.

So let’s see how they did.

Vivek Ramaswamy is still playing a hot hand on Nasdaq, but he may have lost a bit of the sizzle that has supported his other plays.

Ramaswamy’s biotech Urovant $UROV raised $140 million, selling 10 million shares at $14 a pop. That’s the low end of the range. 

Always interested in raising cash in chunks of $100 million-plus at a time, Ramaswamy is spending much of the new money at Urovant on vibregon — an oral β3-adrenergic agonist bladder relaxer obtained in a deal with Merck a year ago and now in an ongoing Phase III study for overactive bladder.

Vivek Ramaswamy

The Roivant company also recently picked up the gene therapy hMaxi-K from Ion Channel Innovations. That program has been through some early-stage trial work on safety and efficacy but still has a long ways to go before any regulatory submission.

We’ve been wondering how the market would respond to the latest Ramaswamy IPO after the debacle at Axovant, which is rebuilding the pipeline in the wake of its Phase III flop in Alzheimer’s. At first blush, it seems clear that Ramaswamy hasn’t lost the Midas touch, which insiders will both love and hate.

J.P. Morgan, Jefferies and Cowen are the joint book-running managers.

Arvinas $ARVN, meanwhile, rolled out its IPO on the high end of the range for a bigger batch of stock, grabbing $16 a share for 7.5 million shares and bringing in $120 million.

John Houston

The crew at Arvinas are focused on some next-gen protein degradation work in cancer, with two high-profile partners in Pfizer and Genentech that appeared to have won the attention of investors backing this offering.

Protein degradation has become a hot field in oncology, as new companies look to do better than the original set of therapies that have hit the market. In Arvinas’ case, CEO John Houston has been going after prostate cancer and breast cancer, with their first Phase I for the lead prostate cancer therapy lining up for a start in early 2019.

Goldman Sachs, Citigroup and Piper Jaffray are managing the IPO.

Sutro Biopharma $STRO hit the sweet spot with its IPO, raising $85 million after pricing shares at $15, the middle of the range. It boosted its take by $10 million by upsizing the number of shares available.

Backed by two big collaborators at Merck and Celgene, we know now that in addition to Merck’s $60 million upfront in July, the pharma giant also bought $30 million in Sutro’s stock while committing to $1.6 billion in milestones. That offers a key Big Pharma endorsement for a platform that concentrates heavily on a new generation of cancer-targeting antibody-drug conjugates and bispecifics. Celgene and Sutro are working on an ADC aimed at BCMA for multiple myeloma — an obsession at the big biotech.

Cowen and Piper Jaffray are the lead managers.

It could be that Entasis’ troubles are due primarily to its focus on antibiotics, where the upside is not nearly as well established as other fields. We’ll know more after these other three stocks start trading.

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Skyhawk Therapeutics Waltham, MA
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Elektroki Boston, MA
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Elektroki Boston, MA
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Recursion Pharmaceuticals Salt Lake City, UT

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