Upsized and top-of-the-range: Fall round of biotech IPOs starts with a solid hit for Principia
Anyone considering a biotech IPO will want to pay close attention to the latest success story on Nasdaq.
Principia Biopharma raised $106 million from a beefed up IPO, selling 6.2 million shares at $17 a pop — the top end of the range. The South San Francisco-based biotech — with an executive crew drawn from the ranks at Roche/Genentech — will now start trading under the $PRNB symbol.
Why is it important?
This is the first of a new batch of S-1-ready companies to file for a fall IPO. Just before the summer lull we saw a big wave of new offerings — which generally did quite well despite being heavily dominated by preclinical and early-stage companies — the very definition of high risk/high reward.
By the mid point of the year we had seen a big surge in IPOs similar to what had been recorded for 2014 — a gangbuster year that saw a big wave of more mature companies go public after waiting out the drought. New signs that investors still have an appetite for heavy risk will likely inspire more CEOs to take a shot before the end of this year. And that means a fresh flow of funds into R&D that will keep valuations high.
Principia fits in well with this crowd. Their lead drug is a BTK inhibitor for autoimmune diseases dubbed PRN1008. In a Phase II study for rare cases of a chronic skin condition called pemphigus, researchers say they tracked a 54% rate of disease control for 26 patients on low-dose corticosteroids — with patients on low-dose corticosteroids versus a standard high-dose for steroids — and an 80% control rate at day 85 for 20 evaluable patients. That study is continuing.