The pandemic IPOs keep rolling, as Generation, Avidity, Vaxcyte each claim 200M+
If it wasn’t already, biotech’s pandemic IPO boom is in full swing.
After a week that saw the largest Chinese biotech IPO in history and another $154 million for a company that emerged only last September, four different biotechs raised over $200 million. Each of them upsized their offerings or priced at the top end — or more — of their original range.
Collectively, they raised $926 million, or an average of $231 million per company.
The new raises are part of a broader trend, as investors have flocked to biotech stocks as islands of stability in an increasingly rocky and pandemic-stricken stock market. Largely, that’s meant ballooning valuations for public companies, such as Moderna and Vir, who are making treatments or vaccines for Covid-19.
But the companies going public this week don’t have large Covid-19 programs. They consist of a Chinese cancer detection company and three companies that are still preclinical, a stage when it used to be rare for companies to go public, let alone raise vast capital. The new rounds are a continuation of that trend, glimpses of which were seen before the outbreak hit the US, as the market showed an appetite for such early-stage ventures.
Six preclinical biotechs have now raised over $150 million in 2020, compared with just two over the previous three years, according to numbers from Renaissance Capital. That includes David Liu’s Beam Therapeutics, which raised $180 million on a base pair editing platform in February, Jim Wilson’s Passage Bio, and Versant’s Black Diamond Therapeutics.
Generation Bio was the first company to go public this week, grabbing $200 million in a twice-upsized offering. Run by Genzyme vet Geoff McDonough, it’s developing gene therapies that can be delivered by lipid nanoparticles instead of viral vectors. The idea is that the nanoparticles can last as long as the now-common adeno-associated viruses, while being easier to scale and sell for less than the current multi-million dollar price tags for gene therapies.
In January, the company raised $110 million, bringing their total to $235 million. At the time, McDonough told Endpoints News they might look for an IPO in 12 to 18 months to fund their clinical work.
Avidity Biosciences, an Eli Lilly-backed antisense biotech, priced at $14 to $16, upsized the range to $17 to $18, and then priced at the high end of that, earning $259 million in the end. The company works on muscle disorders, particularly myotonic muscular dystrophy. They combine antisense oligonucleotides — an old way of drugging RNA — with homing antibodies to create what they call antibody oligonucleotides conjugates. The idea is that the antibody will guide the antisense to sequences that were previously difficult to target. Their last round was in November, for $100 million.
Vaxcyte filed for its IPO exactly two months after it raised $110 million in a Series D, and ended up raising $249 million. At the time of the last raise, it was known as SutroVax — a holdover from its days as a spinout of Sutro Biopharma — but they changed their name and logo in advance of filing for what was originally stenciled as a $100 million IPO.
There may be no better time to go public as a vaccine company, and the return of vaccines to the center of public attention may have boosted their overall raise, but Vaxcyte is working on a far different market and type of inoculation than coronavirus. The company is trying to create a follow-up to Prevnar13, the Pfizer pneumonia vaccine that’s earned over $30 billion in one of the few blockbuster vaccine markets. Vaxcyte’s lead product is meant to guard against 24 strains of bacteria, instead of Prevnar’s 13, and is competing against experimental inoculations at Pfizer and elsewhere.
In the final large raise, Illumina-partnered Burning Rock Biotech, a DNA-sequencing based cancer detection company, earned $223 million, pricing a dollar above their original $13.50 to $15.50 range. They got to ring the opening bell today at the Nasdaq.
And on a smaller note, AI-focused Chinese biotech, Lantern Pharma had an ever-so-slightly upsized IPO. They filed for $25 million and raised $26 million.