The IPO market has started off 2024 rather quietly.
Only two deals valued over $50 million have priced and just 13 companies have filed plans to go public so far this year, according to Renaissance Capital.
However, there are signs that this dormancy is about to end, especially in the biopharma sector. Shares of public companies have rebounded sharply with the rest of the market since late October, with interest rates peaking and deal making picking up.
In recent weeks, several biopharma companies have filed plans to go public; at least one is close to pricing its deal. And hedge funds stand to benefit from these offerings.
The company furthest along in the process is CG Oncology, a biotech company that is in Phase 3 of development of an oncolytic immunotherapy for bladder cancer. It boosted its anticipated offering size to 17 million shares from a previously filed 11.8 million shares, at a price range of $16 to $18, according to a regulatory filing. At the midpoint, the company would raise $289 million.
No hedge fund is listed in CG’s filing as a holder of at least 5 percent of the shares. However, RA Capital Management participated in at least two earlier private financing rounds. It was one of a slew of investors in the company’s August 2023 $105 million crossover financing round, which was oversubscribed. Avidity Partners also took part in the financing.
In addition, RA Capital participated in the oversubscribed November 2022 $120 million Series E financing round.
Two other companies filed initial plans to go public earlier this month.
One is Alto Neuroscience, which said its mission is to “redefine psychiatry by leveraging neurobiology to develop personalized and highly effective treatment options.” It has successfully completed Phase 2a trials for two product candidates. So far, the company has not disclosed the number of shares it plans to sell or the anticipated price range.
According to its initial filing, Alpha Wave Ventures II is the largest shareholder, with 17.8 percent of shares before the offering. Alpha Wave Global was formerly called Falcon Edge Capital. It was co-founded in 2012 by Richard Gerson, Ryan Khoury, and Navroz Udwadia. Tiger Grandcub Gerson, the chairman and CIO of Alpha Wave Global, was a founding member and managing director of Blue Ridge Capital, a now-shuttered hedge fund firm founded by Tiger Cub John Griffin.
In addition, Steven Cohen’s Point72 Asset Management participated in the company’s oversubscribed November 2023 $45 million Series C financing round. However, the firm is not listed in Alto’s regulatory filing as a 5 percent holder.
Another biopharma that recently filed initial plans to go public is Kyverna Therapeutics, a clinical-stage company focused on developing cell therapies for patients suffering from autoimmune diseases. Several entities affiliated with RTW Investments together own 5.3 percent of the shares, according to the regulatory filing. They hold underlying common stock shares of Series B convertible preferred stock.
