The biotech IPO boom is becoming ‘historic’ as four more throw their hats in
Four more US biotechs filed to go public Friday as yet more companies clamber to get through a yawning IPO window and onto a market that’s signaled its willingness to reward nearly any new drugmaker.
The new entrants are led by ALX Oncology and the biological analytics biotech Berkeley Lights, each of whom filed to raise $100 million. The autoimmune company Pandion Therapeutics also filed for $75 million, and Kiromic Biopharma, a tiny immuno-oncology startup based in San Antonio, filed for $25 million.
These companies will try to capitalize on a 2020 biotech IPO boom that the investment firm Renaissance Capital recently called “historic.” The spree began in January and, after a brief interlude when the pandemic first hit the US and Europe, has only picked up in the last two months. The 23 companies that have gone public averaged an 80% return on their offering price, according to Renaissance Capital numbers. Every single one priced above their midpoint or upsized their offering.
Unlike most of their fellow newly or would-be public biotechs, Berkeley Lights will enter the market with significant revenue on the books. The company doesn’t make drugs but instead has built a “digital cell biology” platform that can analyze living cells from a variety of different dimensions and, in principal, accelerate drug development. They’ve partnered with Sanofi and Pfizer on antibody discovery and last year, signed a $150 million pact with Ginkgo Bioworks to help the synthetic biology unicorn advance its genetic engineering capabilities.
All told, the company earned $51 million in revenue last year. Unlike a drug developer, they have no cash earmarked for specific pipeline products, and said they will use proceeds for research, potential acquisitions and “general corporate purposes.”
For ALX Oncology, a successful offering would mean their second $100 million tranche of the year. In February, the California biotech raised $105 million to help advance its sole pipeline candidate: an antibody designed to target CD47. That’s the same “don’t-eat-me” signal targeted by Irv Weissman’s Forty Seven Inc., the biotech Gilead paid $5 billion for in January. ALX’s pitch is that their antibody’s FC receptor is engineered to not attract macrophages, reducing toxicity. The biotech will use their proceeds to push the drug through its ongoing head and neck squamous cell carcinoma and gastric cancer trial and begin new trials for it in acute myeloid leukemia and myelodysplastic syndrome. A portion is also earmarked for CMC work.
Founded out of Polaris in 2018, Pandion Therapeutics was tapped last year for an up-to $800 million partnership to help a reorganizing Astellas develop antibodies for auto-immune disorders. That deal included $45 million upfront and the company also earned $80 million from a Series B in April. The new funding will be used to push their lead molecule through Phase I/II trials in ulcerative colitis while also backing preclinical research, particularly on a pair of antibodies meant to turn on the PD-1 checkpoint and tamp down the immune system.
Kiromic, meanwhile, is in part just trying to stay alive. With less than $2 million — $5 million when a subsequent $3 million Series B is included — in the bank at year’s end, they acknowledged in their S-1 that there’s “substantial doubt regarding the Company’s ability to continue as a going concern.” In this climate, though, that’s worked out just fine for other companies. Applied Molecular Transport went public in May with the same concerns. They ultimately raised $177 million.