Two new IPOs — upsized and over the range — score $226M and signal a possible comeback for biotech

Ron Bentsur, Urogen

There are two new biotech IPOs out and trading this morning, and both are offering some preliminary signs that the biotech window is opening up after a long, lean spell.

The big one is going to Biohaven $BHVN, a startup that has been whipped into shape with a pipeline led by industry castoffs for pain. Their IPO was priced at $17 a share, actually above the range, which we haven’t seen very often. The company scored a rich haul of $168 million on the sale of 9.9 million shares.

The New Haven-based biotech’s lead drug is a CGRP therapy for migraine, a crowded field in the biopharma industry with big and little competitors — Eli Lilly, Amgen/Novartis, Teva and Alder — lining up NDAs. Biohaven recently grabbed its drug from Bristol-Myers Squibb. The S-1 spells out a pact that includes up to about $350 million in development and sales milestones, but only $9 million due in 90 days of the filing — $5 million of that up front.

The second IPO out this morning belongs to UroGen Pharma, a biotech which definitely isn’t planning a moonshot.

The little biotech is using a gel it developed to deliver an old, reformulated chemotherapy to the bladder, injected where needed to deliver a steady dose to patients suffering from urothelial cancer. Its budget was small enough last year that a $17.5 million upfront from an Allergan deal covered most of its costs.

And it just priced an upsized offering right at the middle of the range that was projected — offering another sign to a whole large bevy of biotechs anxiously waiting for the IPO window to open up that the time may be right, for the moment at least.

UroGen, which has an R&D group in Israel and a US office, had planned to sell 3.5 million shares at $12 to $14 a share. But they added a million shares and wound up selling at $13. The stock ($URGN) starts trading today.

Arie Belldegrun

The biotech was rumored to be in a group of companies looking to make the leap to Nasdaq in 2016, but last year’s market wasn’t very accommodating to biotech, and like dozens of other companies, they evidently bided their time. UroGen jumps into the market with a growing queue of drug developers looking to do the same. It’s not a huge number, but any sign of awakening is likely to be tracked eagerly by others in the same boat.

Ron Bentsur, ex-Keryx CEO, is helming the company and its chairman is Arie Belldegrun, the Kite CEO who’s racing Novartis to the first potential approval of a CAR-T. Their lead program began a pivotal study earlier this year and the company believes that because they’re not working with a new chemical entity, they could get an approval with an expedited effort.

Allergan stepped in last year with a deal to get rights to the gel, as they believe Botox can help in treating an overactive bladder. There’s also more than $200 million in milestones on the table, which the F-1 breaks down as:

$7.5 million upon submission of an IND to the FDA for a Licensed Product; $20.0 million upon initiation of a Phase 3 clinical trial for a Licensed Product for overactive bladder; $15.0 million upon initiation of a Phase 3 clinical trial for a Licensed Product for a specified second indication; $50.0 million and $25.0 million upon the first commercial sale of a Licensed Product for overactive bladder in the United States and the European Union, respectively; $25.0 million and $15.0 million upon the first commercial sale of a Licensed Product for a specified second indication in the United States and the European Union, respectively; and $50.0 million upon net sales of all Licensed Products of $500.0 million.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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