Shares of Aduro Biotech Inc. (NASDAQ:ADRO) rose 147 percent to $42 in the company's Nasdaq debut Wednesday as investors clamored to get a piece of the cancer immunotherapy company's upsized 7 million share offering.
The IPO, which raised net proceeds of about $107.7 million, gave the company an initial $1.2 billion market cap at the end of its first day of trading and made it the first billion-dollar health care company to double in more than 10 years, according to Renaissance Capital, a manager of IPO-focused ETFs.
Leaping onto Nasdaq in another IPO, monoclonal antibody specialist Xbiotech Inc. also saw its shares (NASDAQ:XBIT) rise, climbing 22.4 percent to $23.25 from an initial listing price of $19 each. The day's third IPO contender, Cidara Therapeutics Inc., barely budged at all from the opening, with shares (NASDAQ:CDTX) ending where they started, at $16 each.
The three tax-day issues join the U.S. market in the wake of Carbylan Therapeutics Inc.'s $66.1 million IPO. The set of four debuts that follows a relatively sleepy first quarter in which 34 IPOs raised just $5.4 billion across all industries, according to Renaissance, which said it was the least active quarter by IPO count since the first quarter of 2013 and the smallest by proceeds raised since the third quarter of 2011.
Aduro started with smaller ambitions. It had once planned a 5 million share offering priced between $14 and $16, but enlarged the offering Tuesday. The company will use proceeds to complete trials of a combination of CRS-207 and Gvax Pancreas in pancreatic cancer; to advance development of the therapy in additional indications, including planned phase II trials in mesothelioma and ovarian cancer; and to support commercial scale manufacturing and R&D work. (See BioWorld Today, March 31, 2015.)
Merrill Lynch, Pierce, Fenner & Smith Inc. and Leerink Partners LLC are the joint bookrunners on the deal. William Blair & Co. LLC and Canaccord Genuity Inc. are acting as co-managers.
That Aduro would gain such momentum in its debut is unsurprising. The Berkeley, Calif.-based company has drawn significant interest from big pharma, giving its platform validation in the eyes of would-be investors. Basel, Switzerland-based Novartis AG, inked a $750 million deal with it in March to develop and commercialize immuno-oncology products generated from its stimulator of interferon genes targeted cyclic dinucleotide platform technology.
A separate deal with Johnson & Johnson unit Janssen Biotech Inc., announced in October 2014, added an exclusive global license for a lung cancer treatment to an exclusive licensing of prostate cancer candidates that Janssen took in May 2014, raising the total potential value of deals between Aduro and Johnson to about $1.2 billion. (See BioWorld Today, March 31, 2015.)
THE POWER OF X
Xbiotech Inc., of Austin, Texas, raised net proceeds of $72.2 million in its IPO, selling 4 million shares priced at $19 each. WR Hambrecht + Co, the financing's sole underwriter, offered company shares on a best efforts basis.
Funds from the offering will be used to complete a phase III trial of its experimental metastatic colorectal cancer therapy Xilonix, an FDA fast-tracked antibody that neutralizes interleukin-6, in the U.S. and Europe; to finish building manufacturing and R&D facilities under construction; and to get to the end of a phase I/II study for a treatment for Staphylococcus aureus infections (currently on clinical hold) and a phase II study of another drug to treat pyoderma gangrenosum (PG). (See BioWorld Today, Oct. 5, 2012.)
In a discussion of the year ahead filed with the SEC, the company said that given positive results to date in the phase II study of Xilonix for PG, the company may seek breakthrough status for the drug from the FDA on the way to conducting pivotal phase III trials for the orphan indication in the U.S. and Europe.
FINDING STILLNESS ON K2
Managing the unusual trick of standing still in a oft-volatile market for biotech equities, Cidara Therapeutics sold 4.8 million shares at $16 each, the high end of its $14 to $16 range. Jefferies & Co. and Leerink Partners LLC acted as lead managers on the offering.
Originally named K2 Therapeutics Inc., the San Diego-based company is developing I.V. and topical formulations of the echinocandin CD101 for the treatment of serious fungal infections and C001, for the treatment of invasive aspergillosis, a drug based on its Cloudbreak immunotherapy platform. It's led by Jeff Stein, former CEO of Trius Therapeutics Inc., which was swallowed up by Merck & Co.-acquired Cubist Pharmaceuticals Inc.
The company expected net proceeds of about $53 million, or about $61.4 million if the underwriters' option to purchase additional shares is exercised in full. It plans to use proceeds from the offering to fund clinical development of CD101 I.V. and CD101 topical through the completion of phase II trials and to fund initiation of the pivotal phase III trial for CD101 topical. The remainder will primarily fund preclinical development, investigational new drug application-enabling studies and early trials of its current Cloudbreak development candidates.
With 20 biotech filed and pending IPOs on global markets, the second quarter could be a busy one. Among the largest potential issuers on deck are Adaptimmune Therapeutics plc, which filed to raise up to $150 million, as well as Atyr Pharma Inc. and Clarus Therapeutics Inc., which are both planning $86.3 million offerings.