Arcus Biosciences provided fresh evidence that the biotech IPO window is open for business — particularly if you have a claim to future immuno-oncology glory. The biotech raised $120 million, selling an upsized package of 8 million shares at $15 a pop.
That’s another high-range offering, which no doubt will encourage more startups to jump into the IPO game this year, with the money spigot open wide for well connected companies. And the stock swiftly added 21% Thursday in its first day of trading, breaking the $18 mark.
The Hayward, CA-based biotech will sell shares under the $RCUS symbol. Citi, Goldman Sachs and Leerink Partners acted as lead managers on the deal, which will also inspire some loyal support from analysts.
Arcus raised a $107 million crossover round last November, largely on the promise of an upcoming Phase I/II study of AB928, a dual adenosine receptor antagonist, with their own PD-1 antibody. That may seem like a skimpy resume to bet on, but CEO Terry Rosen went from the launch of Flexus to its sale to Bristol-Myers Squibb buyout for $1.25 billion in less than two years.
The fact that Incyte filed suit related to the star program at Flexus claiming that an ex-staffer had walked out with trade secrets on their lead IDO drug hasn’t hindered their progress one little bit. Their list of backers includes Novartis, Google’s GV and The Column Group.
Some of this money will be used to back the preclinical work on AB680 (a CD73 inhibitor) and AB154 (an anti-TIGIT antibody). And with $347 million raised now since their launch in 2015, they expect they’ll need a lot more before reaching the threshold of a marketing approval. But they aren’t hurting for money.
The biotech had burned through $73 million by the end of 2017, with $175.7 million left in the bank. The IPO cash will land on top of that nest egg.
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