Although the appetite for biopharma IPOs in the U.S. slowed during the meltdown of the financial markets in March, the flow of new offerings has been steady this year, according to BioWorld, with 11 companies graduating to the public stage and listing on U.S. exchanges by the end of April, collectively raising $1.774 billion along the way. This amount is 9.5% higher than the $1.62 billion raised from 15 U.S. biopharma IPOs completed in the same period last year.
Nine companies raised more than $100 million from their offerings, which contributed to the higher total capital raise this year. (See U.S. Biopharma IPOs completed in 2020, below)
Four of those companies garnered more than $200 million from their IPOs, including Redwood City, Calif.-based Revolution Medicines Inc., which raised almost $273 million. The company is focused on the RAS and mTOR signaling pathways and its lead candidate, RMC-4630, is described as a potent and selective inhibitor of SHP2, a central node in the RAS pathway. In collaboration with Paris-based Sanofi SA, RMC-4630 is being evaluated in a phase I monotherapy trial for a range of tumor types featuring specific, molecularly defined oncogenic mutations, as well as a phase Ib/II study in combination with cobimetinib in patients with relapsed/refractory solid tumors displaying specific genomic mutations.
Since its first day listing, Revolution Medicine’s shares (NASDAQ:RVMD) have performed very well, increasing in valuation by 84% as of the end of April. In fact, eight of the companies have seen significant jumps in their share prices following their listings. As a group, the collective return has been a whopping 44%, a fact that will surely encourage other biopharma companies that are contemplating a move to the public ranks.
Leading gainer so far is another cancer drug developer, Zentalis Pharmaceuticals Inc., which priced an upsized IPO in April generating $190 million, a total that included the underwriters exercising in full their option to purchase additional 1.37 million shares of its common stock. The company’s lead candidate, ZN-c5, is an oral selective estrogen receptor degrader for estrogen receptor-positive, HER2-negative breast cancer. The company expects to report top-line data from the phase I, monotherapy dose-escalation portion of an ongoing phase I/II trial in the second half of the year. At the end of the month, its shares (NASDAQ:ZNTL) were trading at $35.10, almost double their first day listing price.
Investors have certainly been impressed with cancer-focused companies that have listed this year, including Cambridge, Mass.-based Black Diamond Therapeutics Inc., which priced an upsized IPO in January for gross proceeds of about $231 million. Since then, its shares (NASDAQ:BDTX) have doubled and at market close April 30, they were trading up almost 95% at $37.04.
The company, in its fourth-quarter financial results, reported that it had initiated a phase I/II trial of its lead product candidate, BDTX-189, a mutation spectrum-selective, oral, irreversible small-molecule inhibitor product, which targets cancer-causing driver mutations in HER2 and EGFR that have not yet been drugged. The phase I portion of the trial will evaluate escalating doses of BDTX-189 and is designed to determine the recommended phase II dose and to assess preliminary indications of antitumor activity.
Offerings keep coming
With the gradual improvement in the general markets, it is likely that the flow of biopharma IPOs will continue. Already, Lyra Therapeutics Inc. has priced its IPO of 3.5 million shares at $16 per share, grossing the company $56 million. That followed the Watertown, Mass.-based company’s $30 million series C financing in January. Its lead product candidates, LYR-210 and LYR-220, are bioresorbable polymeric matrices being developed for the treatment of chronic rhinosinusitis and designed to deliver up to six months of continuous drug therapy to the sinonasal passages, with LYR-210 targeting surgically naïve patients and LYR-220 for operated patients.
Its technology platform, Xtreo, has been developed to precisely and consistently deliver medicines directly to the affected tissue for sustained periods with a single administration. Shares of Lyra (NASDAQ:LYRA) closed at $18.56 in its first day of trading on May 1.
Also, on the IPO runway is Ayala Pharmaceuticals Inc., of Rehovot, Israel, that has established terms for its proposed IPO and plans to raise up to $50 million by offering 3.3 million shares at a price range of $14 to $16. The funds will support clinical development of AL-101, previously known as BMS-906024, the company's lead candidate under study as a potential therapy for recurrent metastatic adenoid cystic carcinoma and triple-negative breast cancer. The funds will also support development of AL-102, previously known as BMS-986115, which is being studied for the treatment of desmoid tumors. Both candidates are exclusively licensed from New York-based Bristol Myers Squibb Co. and are small-molecule gamma secretase inhibitors targeting the aberrant activation of the Notch pathway. The company plans to list its shares on Nasdaq under the symbol AYLA.
In addition, ADC Therapeutics SA, of Lausanne, Switzerland, a late clinical-stage oncology-focused company developing targeted antibody-drug conjugates for hematological malignancies and solid tumors, filed a registration statement with the SEC this month to conduct a proposed IPO of its common shares. The company intends to list its shares on the New York Stock Exchange under the ticker symbol ADCT.