Investors have warmed up to biopharma IPOs.
Not only are deals going off at higher valuations than the companies initially anticipated, but the prices have been popping after the stocks began trading in the public markets. Observers are hoping this success might become contagious and encourage more VC-backed tech-related companies to go public as well — a sector that has seen few IPOs.
The latest example: Late last week, biotech Septerna sold 16 million shares for $18 each in its initial public offering, raising $288 million. This was the second revision of its deal terms. The company, which says it is pioneering small-molecule drug discovery, initially planned to sell nearly 11 million shares for between $15 and $17 per share, then amended its plans to 15.3 million shares for $18 each. The stock closed Tuesday at $20.02, up more than 11 percent from the IPO price.
At least seven venture capital and hedge fund firms own at least 5 percent of the shares, including RA Capital Management, the second-largest shareholder, with 10.9 percent of the shares, and Deep Track Biotechnology Master Fund. Earlier this month, Ceribell sold 10.6 million shares for $17 a share, the high end of the range of $16 to $17. It originally planned to sell 6.7 million shares for between $14 and $16 per share. The stock is already up more than 54 percent.
Six venture capital funds are listed in the IPO-related filing as owners of more than 5 percent of the shares of the medical technology company before it went public. Previous investors RA Capital Management and Redmile Group did not own at least 5 percent of the shares before the IPO.
Upstream Bio, which is developing treatments for inflammatory diseases, went public the same day as Ceribell, offering 15 million shares for $17 apiece, the high end of its anticipated range of $15 to $17. It had earlier planned to offer 12.5 million shares. On Tuesday, it was up 48 percent from the IPO price. Ten VC firms held more than 5 percent of the shares before the offering, including entities affiliated with OrbiMed Advisors, with 13.4 percent.
Meanwhile, BioAge Labs, which went public in late September, is up nearly 40 percent from its IPO price. It sold 11 million shares at $18 apiece, the second time it raised its terms. At least eight VC and hedge fund firms owned more than 5 percent of the shares before the offering, including RA Capital, which owned 5.8 percent of the shares, and Cormorant Asset Management, with 5.22 percent.
In earlier deals, shares of Bicara Therapeutics, which went public on September 12 at $18 per share, are up more than 31 percent. RA Capital owned 15 percent of the shares before the IPO.
MBX Biosciences, which is developing new treatments for endocrine and metabolic disorders, is up about 36.6 percent since going public on September 12. It sold 10.2 million shares at $16 a pop, the high end of its anticipated range. It originally planned to sell a little more than 8 million shares. Several hedge funds were major investors in the company, including Deep Track Biotechnology Master Fund and RA Capital.
On September 12, Zenas BioPharma sold 13.2 million shares for $17 each, up more than 21 percent from the IPO price on Tuesday.