Several hedge funds are poised to benefit from what has become a rare initial public offering.
Bicara Therapeutics, a clinical-stage biopharmaceuticals company working to develop transformative therapies for patients with solid tumors, last week filed plans to go public. It has not revealed the terms of the deal, including the number of shares it plans to offer or the target price.
RA Capital Management is by far the largest hedge fund investor in the company, holding 15 percent of the shares before the offering, according to a regulatory filing. The life sciences specialist had previously invested in at least two financing rounds. RA Capital’s hedge fund and venture capital funds have invested in the stock.
The holdings include more than 18.4 million shares that will be issued in the conversion of Series B convertible preferred stock and more than 5.8 million shares that will be issued in the conversion of the Series C redeemable convertible preferred stock held by hedge fund RA Capital Healthcare Fund.
RA Capital Nexus Fund III, the investment firm’s latest venture capital fund, will hold an additional 12.27 million shares (after the conversion of the Series B redeemable convertible preferred stock) and more than 10.8 million shares after the conversion of a similar Series C preferred stock.
RA Capital co-led the Series B financing. Under the deal, Jake Simson, an RA Capital partner, joined Bicara’s board of directors.
Several other hedge funds previously invested in Bicara, but their stakes are not highlighted in the regulatory filing as none amounts to at least 5 percent of the total shares.
For example, Janus Henderson, which has a dedicated biotech strategy, participated in the same two financings as RA Capital, but apparently to a much lesser extent. Deerfield Management and Braidwell participated in the Series C financing. Both the Series B and Series C financings took place in 2023.
It is not clear when Bicara plans to price its shares and begin trading.
IPOs have all but dried up since the stock market in general became much more volatile in mid-July. So far this month, only four companies have gone public, one of them a biopharma company, according to Renaissance Capital.
Actuate Therapeutics, which went public on August 12 at $8 per share, is currently trading around $8.17, up a little more than 2 percent from its IPO price.