Flush Thrush: Bluebird's IPO at 'Beak' Value, Gets $101M
By Randy Osborne
Bluebird Bio Inc.'s above-the-range initial public offering (IPO) sold about 5.9 million shares at $17 each to raise $101 million for a gene therapy strategy that deploys stem cells harvested from the patient's bone marrow, and the lead program is slated to kick off a Phase II/III trial late this year in childhood cerebral adrenoleukodystrophy (CCALD), caused by the buildup of fatty acids that damages the myelin sheath.
The Cambridge, Mass.-based firm's stock (NASDAQ:BLUE) closed Wednesday at $26.87, up $9.87, or 58 percent.
In May, the company, which changed its name a few years ago from Genetix Pharmaceuticals Inc., had filed to sell 5 million shares at a price range between $14 and $16.
Called Lenti-D, the lead candidate could become a one-time therapy for CCALD, which entails the ex vivo insertion of a functional copy of the ABCD1 gene into a patient's own hematopoietic stem cells. The approach has gained orphan drug designation from the FDA as well as European regulators.
Bluebird's main investor is Third Rock Ventures, which held about 28 percent of the firm before the IPO. Other backers include TVM Capital, Fidelity Investments, Arch Venture Partners and Capital Research and Management.
In the spring, Bluebird struck a deal with Summit, N.J.-based Celgene Corp., which made an undisclosed up-front payment and pledged up to $225 million per product in potential option fees and clinical and regulatory milestones. (See BioWorld Today, March 22, 2013.)
Founded in 1993, the company gained renewed vigor in 2004 with a Series A investment by TVM, Forbion and Easton Capital.
As Genetix, Bluebird carried out the human proof-of-concept experiments in CCALD and thalassemia. In the Series B financing, Third Rock and Genzyme Ventures joined the group. (See BioWorld Today, March 10, 2010.)
Another company supported by Third Rock is waiting to go public. Agios Pharmaceuticals Inc., also of Cambridge, Mass., filed earlier this month for an IPO to raise up to $86 million to fund development of its pipeline in cancer and inborn errors of metabolism, a subset of orphan genetic metabolic diseases. Agios also is partnered with Celgene, which agreed to concurrently purchase an undetermined amount of common stock at the public offering price. (See BioWorld Today, June 12, 2013.)
Agios' two lead cancer programs target mutations in isocitrate dehydrogenase 1 and 2 (IDH1 and IDH2). The drug candidates target mutated forms of the enzymes that are found in cancer cells. Agios expects to begin clinical trials by the middle of 2013 for its IDH2 candidate, AG-221, and in early 2014 for its IDH1 candidate, AG-120. Third Rock owns about 23 percent of that company.
J.P. Morgan Securities LLC and BofA Merrill Lynch are acting as joint book-running managers for the Bluebird IPO. Cowen and Co. is acting as lead manager and Canaccord Genuity Inc. and Wedbush PacGrow Life Sciences are acting as co-managers. Underwriters have a 30-day option to purchase up to 891,176 more shares of common stock from Bluebird.
In other financing news:
Biodel Inc., of Danbury, Conn., priced an underwritten public offering of about 4.4 million shares of its common stock at $4.35 per share, for gross proceeds of about $19.4 million. The offering is expected to close on June 24. Biodel also granted the underwriters a 30-day option to purchase up to an additional 672,414 shares to cover overallotments. The company's stock (NASDAQ:BIOD) closed Wednesday at $4.35, down 41 cents. William Blair & Co. LLC is acting as the sole book-running manager of the offering and Ladenburg Thalmann & Co. Inc. is acting as co-manager.
Intercept Pharmaceuticals Inc., of New York, priced an underwritten public offering of about 1.7 million shares of its common stock at a price of $33.01 per share, for gross proceeds of about $57 million. Intercept has granted the underwriters a 30-day option to purchase up to an additional 259,500 shares of common stock. Net proceeds to Intercept are expected to total about $53.3 million. The offering is expected to close on or about June 24. BofA Merrill Lynch and Citigroup are acting as joint book-running managers, BMO Capital Markets is acting as lead manager and Needham & Co., Wedbush PacGrow Life Sciences and Janney Montgomery Scott are acting as co-managers for the offering. Intercept's stock (NASDAQ:ICPT) closed Wednesday at $38.41, up $5.40, or 16.4 percent.
Iroko Pharmaceuticals LLC, of Philadelphia, filed to raise up to $145 million in an initial public offering. The firm plans to list on Nasdaq under the symbol "IRKO." Iroko filed confidentially in March. Jefferies and William Blair are the joint bookrunners on the deal. Pricing terms were not disclosed.
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