Shutdown thrusts Gossamer Bio onto a rarely used path for fixed-price IPO
From day 1 Gossamer has always been a biotech in a hurry. And they’re not about to let a little thing like a government shutdown stymy their plans for an IPO.
As the partial US government shutdown continues to paralyze the SEC, Gossamer Bio has elected to use a rare and riskier method to make the leap into Nasdaq. The biotech is foregoing the typically lengthy SEC review of their prospectus to greenlight the listing in favor of enabling their registration by locking in their IPO price 20 days before making a market debut.
According to the amended filing, it plans to offer 14.4 million shares priced at $16/share, which will allow the company to raise roughly $230 million in gross proceeds. Meanwhile, existing stockholders have indicated their interest in purchasing about $100 million in shares in the offering at the IPO price of $16.
The San Diego-based biotech originally filed its prospectus with the SEC on December 21, one day preceding the shutdown, but on Wednesday amended that filing to reflect its new plan to go public via the fixed-price IPO. This type of registration will allow it to begin trading on February 13 on the Nasdaq under the symbol $GOSS.
The road to an IPO can be long and littered with SEC communication that reflects the agency’s deep dive into the company’s disclosures before the green light is sanctioned, following which investors indicate their enthusiasm or lack thereof by making bids on the higher or lower end of the price band offered. The absence of an explicit SEC endorsement could serve to haunt the company later down the line, if the disclosures made by the company come up short or the SEC questions them upon reopening.
The Wall Street Journal earlier this week suggested that Nasdaq has balked at the 20-day rule. Nevertheless, Gossamer will test the waters and perhaps inspire others to follow suit. TCR2 is also studying the IPO gambit, according to the WSJ report.
The company, originally named FSG Bio, was founded by former Receptos CMO Sheila Gujrathi and Faheem Hasnain, the ex-Receptos CEO, in 2015, shortly after Receptos was bought out by Celgene. Currently 14 senior executives and directors together hold nearly 33% of the company, whose two biggest shareholders are ARCH Venture Partners with 17.5% and Omega Fund V with 15.1%.
Faheem Hasnain on stage at the Endpoints News / PharmCube #BIIS18 summit in Shanghai, October 2018 — Endpoints News
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Gossamer’s name is tied to the symbolism behind the gossamer thread, a fragile, invisible connection that binds relationships. The biotech is focused on immunology, inflammation and oncology, has three drugs in the clinic, and another in preclinical testing.
BofA Merrill Lynch, Leerink, Barclays, and Evercore are the joint bookrunners on the deal.