With two debuts and a SPAC, biopharma notches another busy week as IPO raise soars past $7B
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After a slight lull in the IPO market earlier this month, the industry returned in full force this week by celebrating two new Nasdaq entrants in addition to a SPAC merger.
Centessa comes in as the biggest winner, pulling in a $330 million haul and pricing above its expected range at $20 per share Friday. The 10-in-1 holding company marks the fourth-largest IPO raise among biotechs in 2021, coming ahead of all debutants except for Sana, Zymergen and Recursion.
Day One also launched its IPO on Thursday, netting $160 million after pricing at $16 per share. The pediatric cancer biotech ended its first trading session well in the black, closing up more than 60% from its debut price. Also Thursday, San Diego-based eFFECTOR Therapeutics announced it was going public in a $235 million SPAC deal, which included a $60 million PIPE financing.
The two IPOs this week sent the total 2021 IPO raise hurtling past $7 billion, with the industry raising $7.21 billion among the 45 companies that have debuted, per the Endpoints News tally. Biotech remains on pace to eclipse last year’s record totals of 91 public debuts and a $16.5 billion combined raise.
A couple small biotechs and another SPAC filing added to the mania, with microcap antibiotic biotech Acurx Pharmaceuticals and female cancer biotech Context Therapeutics each penciling in $15 million raises in S-1 filings Thursday.
Francesco De Rubertis’ 10-in-1 play heads to Nasdaq
Centessa’s impressive haul comes just a few months after the company raised $250 million in their Series A.
The goal for Francesco De Rubertis’ legacy play is to create a new kind of pharma company, one that’s rolled up 11 Medicxi subsidiaries into one outfit (including two that eventually merged). Among the players are Jim Huntington’s University of Cambridge spinout Z Factor as well as Inexia, a three-year-old biotech whose assets were transferred earlier this year to Orexia.
Centessa has spent the last few weeks beefing up its C-suite in anticipation of Friday’s debut, appointing the former head of oncology R&D at Daiichi Sankyo, Antoine Yver, as CMO. Yver will head up a portfolio umbrella that currently includes 16 programs, four of which have already reached the clinical stage — the majority of the IPO funds are expected to be funneled toward this quartet.
Despite the positive momentum, Centessa will be moving forward without former Operation Warp Speed chief Moncef Slaoui, who was ousted from several company board seats after a “substantiated” case of sexual harassment for which he apologized. There was no mention of Slaoui in the S-1.
When Centessa begins trading on Friday, it will do so under the ticker $CNTA.
Day One pushing toward a new dawn for pediatric cancer
Day One has also seen lots of positive momentum so far in 2021, and is looking to capitalize with its IPO this week.
Back in February, the biotech raised $130 million in a Series B led by RA Capital, as Day One continued to advance its lead program for childhood gliomas. CEO Jeremy Bender told Endpoints at the time that the candidate had made rapid progress in the nine months since the biotech emerged from stealth, allowing for the quick raise.
Efforts at Day One have centered around an old Takeda program from the beginning, formerly named TAK-580. It cost Day One just $1 million in exchange for a 12% Takeda equity stake. The compound, now called DAY101, is a pan-RAF inhibitor that can cross the blood-brain barrier, blocking mutations that drive cancer in both childhood and adult gliomas.
The initial indication Day One hopes for is pediatric low-grade gliomas, the most common form of childhood brain cancer. Within its S-1, the biotech said it’s looking to fund not only a Phase II trial for DAY101, but also launch a new Phase III study for the frontline treatment of pediatric low grade gliomas next year. If all goes well, DAY101 could see a commercial launch in 2023.
Day One went public Thursday on the ticker $DAWN.
SPAC deal pushes blank check raises past $14.5 billion
eFFECTOR Therapeutics is the third company to go public this week, and they did so on the coattails of a reverse merger.
The San Diego biotech rode the coattails of Locust Walk Acquisition to Nasdaq on Thursday, getting $175 million in funds from the blank-check company and another $60 million in PIPE financing. It’s the 11th life sciences biotech or company to use the SPAC method this year and eighth in Q2.
SPACs themselves flooded the market toward the end of last summer and crested into a tidal wave earlier this year — about 300 SPACs priced their IPOs throughout the entire market before the end of March. Several celebrities got into the game, including star athletes Alex Rodriguez and Shaquille O’Neal.
The heavy action drew the eye of regulators, with the SEC voluntarily asking large financial institutions for documents regarding how they were internally policing SPAC funding. Over the next two months, SPAC debuts have slowed but mergers have begun picking up, with eFFECTOR the latest to take this route.
Funding from the deal will help the biotech complete its Phase IIb trial for its lead candidate, an oral small-molecule inhibitor of mitogen-activated protein kinases 1 and 2, in combination with Keytruda. There are also plans to launch multiple Phase IIa studies for another program, a small-molecule inhibitor of eIF4A.
Once the merger is completed, eFFECTOR will trade under the ticker $EFTR.
Acurx, Context and Sparta Healthcare Acquisition file their S-1s
Three more filings rounded out the busy week, with two biotechs planning their own IPOs and another SPAC shooting for at least a nine-figure raise.
Acurx Pharmaceuticals and Context Therapeutics each filed their S-1s this week, putting down $15 million for their initial estimates. Meanwhile, a SPAC from Cytocom CEO Michael Handley is penciling in $100 million for its blank check raise.
The Staten Island, NY-based Acurx is working on a slate of antibiotics that look to block the DNA polymerase IIIC enzyme. They’re expected to begin a Phase IIb trial for their lead candidate, ibezapolstat, this year in patients with C. difficile infections.
Context is focusing on cancers found in women, including ovarian, breast and endometrial. They expect to read out Phase II results for its only clinical candidate later this year, for ovarian cancer patients who express high levels of progesterone receptor. The company is also running another Phase II trial looking at the program in combination with Arimidex in PR+ endometrial patients, with data expected in the first half of next year.