This year’s flurry of initial public offering (IPO) activity continued Wednesday, as protein and antibody drug developer Five Prime Therapeutics Inc. priced an upsized offering to gross $64.5 million and ophthalmology firm Aerie Pharmaceuticals Inc. added its name to biotech’s IPO queue.

And more news is expected.

“The big picture is that there is a very exciting story unfolding this week,” said Michael Brinkman, managing director at Jefferies, which acted as joint book-running manager for Five Prime’s IPO, alongside BMO Capital Markets and Wells Fargo LLC and co-manager Guggenheim Securities LLC.

Brinkman was referring to the other biotech IPOs expected to price this week, including Acceleron Pharma Inc. and Fate Therapeutics Inc.

“We’ll see what prices and what doesn’t and how well those newly priced stocks fare on Nasdaq,” he said.

For its part, South San Francisco-based Five Prime got off to a fairly good start. The firm increased the number of shares by 8 million, selling a total of 4.8 million shares at $13 apiece, the midpoint of its proposed range, to raise $64.5 million in gross proceeds. Another $9.4 million could come if underwriters exercise their full overallotment option of 720,000 shares.

The company’s shares (NASDAQ:FPRX) had an impressive opening on Wall Street Wednesday, jumping 23 percent on debut, though shares lost most of their buoyancy throughout the day to close at $13.08, up 8 cents. About 4.4 million shares changed hands.

Most biotech IPOs this year have had similar stories, pricing at or even above their proposed ranges and making solid trading debuts. One of the biggest success stories is Epizyme Inc., which saw its shares jump a whopping 53 percent on the first day of trading. The stock has jumped another 58 percent since then. (See BioWorld Today, June 3, 2013.)

“If it trades above, that means a stock is trading on its own,” Brinkman noted. “It takes a lot for a stock to hold up above its IPO price.”

Biotechs going public now are attracting “a lot of interest from short-term investors. They’re the ones you see buying into the IPO and flipping,” Brinkman said. But the core investors – the same roughly 75 biotech investors every company sees on their road shows – are the ones who matter, and they remain as discriminating as ever.

Their participation is “more correlated with long-term success,” he told BioWorld Today.“The larger percentage of investors in that group that get behind an IPO, the more successful that IPO is likely to be.”

And the best way to attract those investors is with data. And “it doesn’t matter what stage,” Brinkman added. Investors want encouraging data that the drug works.

The current IPO window also has been good for platform companies. “People are enthusiastic” about those firms again, “even though they’re early stage, and that’s different from the last decade when nobody cared about platform companies,” he said.

That trend is evident by the successful IPOs of firms with platform technologies, including Epizyme, Agios Pharmaceuticals Inc., Oncomed Pharmaceuticals Inc. and now Five Prime.

Moving to the Clinic

In fact, to date much of Five Prime’s funding – more than $220 million – has been from collaborations involving its platform tech. The company boasts a library of more than 5,600 human extracellular proteins, which has led to a series of collaborations with Glaxosmithkline plc, of London, including a product collaboration, initially inked with GSK acquisition Human Genome Sciences Inc., for FP-1039/GSK3052230, a protein therapeutic designed to trap and neutralize cancer-promoting fibroblast growth factors (FGF). Under the terms, Five Prime retains a co-promotion option in the U.S.

Data from a Phase Ib study testing FP-1039 in patients with abnormally high levels of FGFR1 are expected in the second half of next year.

GSK also is using Five Prime’s drug discovery platforms and protein libraries for programs aimed at muscle diseases, respiratory diseases and cancer. (See BioWorld Today, April 18, 2012.)

Other collaborations have involved Pfizer Inc., Johnson & Johnson unit Centocor Research & Develoment and UCB SA.

Much of Five Prime’s own pipeline, however, remains in early stage development. The company has FPA008, an antibody designed to inhibit colony-stimulating Factor-1 receptor to treat inflammatory diseases such as rheumatoid arthritis. A Phase I study is slated to start this year, with preliminary data available by the end of 2014.

FPA144, an antibody to inhibit FGFR2b for treating gastric cancer and possibly other solid tumors, is set to move into the clinic in the second half of next year.

Proceeds from the IPO will be used largely for those studies. Funds will add to the $28.2 million in the bank as of June 30. (See BioWorld Today, July 30, 2013.)

Five Prime, which is headed by founder Lewis “Rusty” Williams, has an eclectic investor list, including partners Pfizer and GSK, Advanced Technology Ventures, Domain Associates, HealthCap and affiliates, Johnson & Johnson Development Corp., Kleiner Perkins Caufield & Byers, Texas Pacific Group and Versant Ventures.

Aerie Files for IPO

With Five Prime’s pricing, a total of 29 biotechs have gone public in 2013, according to BioWorld Snapshots. Its offering brings the total IPO proceeds this year to about $1.96 billion, with an average IPO haul of $67.5 million.

As to how long the hunger for biotech IPOs will last, “We’ll be able to tell more in a week,” Brinkman said. “But we feel the market is healthy and sustainable.”

Most of the companies that have priced in the current IPO window are high-quality companies that are pricing appropriately and then trading above their offering prices. “When a good IPO for a good company trades down, that’s when we have a problem,” he said.

Meanwhile, companies continue to add their names to the IPO wish list. As of Wednesday, nine biotech IPOs are pending, including the latest filing by ophthalmology firm Aerie. The Bedminster, N.J.-based firm has not disclosed the number of shares or share price but said in its S-1 that it aims to raise $58 million and to gain a listing on Nasdaq under the ticker “AERI.”

Proceeds would be used to support Aerie’s ophthalmology pipeline, including AR-13324, a dual-action candidate designed to inhibit both Rho kinase and norepinephrine transporter for treating glaucoma and ocular hypertension, that has completed Phase IIb testing and is slated to move into registrational trials in the middle of next year.

Aerie also has a triple-action drug, PG324, comprising a fixed-dose combination of AR-13324 and prostaglandin analogue latanoprost, a commonly prescribed drug for glaucoma. That program is expected to start Phase IIb testing in early 2014.

As of June 30, Aerie had about $2.4 million in cash and equivalents.