The strong IPO market continued its march forward, with five life sciences companies joining the public markets this week. The biggest IPO of the week belongs to a biotech company that isn’t working in healthcare—at least not yet. This week’s IPO tally also included commercial-stage medical device makers looking to ramp up their sales and marketing plans.
The second quarter IPO activity so far follows the busiest quarter for newly public companies since 2000, according to IPO research firm Renaissance Capital. In the first quarter of 2021, 102 companies raised $40.3 billion. Healthcare again accounted for the most deals while the tech sector raised the most cash.
IPO pricings of specialty purpose acquisition companies, or SPACs, continued. Renaissance counted more SPAC IPOs in the first quarter of this year than in all of 2020. The filing activity in the first quarter also suggests that the second quarter will be a busy one, Renaissance said.
Here’s a look at this week’s life sciences IPOs.
Zymergen’s upsized IPO raises $500M for “biofacturing” technology
Zymergen, a biotech that engineers microbes to produce bio-based products, upsized its IPO, offering more than 16.1 million shares at $31 apiece. The company had planned to sell 13.6 million shares in the range of $28 to $31 apiece. The IPO haul was about $500 million. The biotech’s shares will trade on the Nasdaq under the stock symbol “ZY.”
Emeryville, California-based Zymergen describes its manufacturing process as “biofacturing.” It harnesses the biological processes of cells to produce the biomolecules that are the key ingredients in products it makes for various applications. The company expects its bio-based approach will be faster, cheaper, and more sustainable compared to manufacturing using traditional chemistry.
“Our pioneering biofacturing process is designed to flexibly and cost effectively create products with unique characteristics that possess the diversity and power of Nature’s own inventions, such as adhesives stronger than leading products on the market, or an optical film as clear and thin as a dragonfly’s wing,” the company said in its IPO filing.
The first Zymergen product, Hyaline, is a film that the electronics industry can use to make foldable touchscreens and high-density flexible printed circuits. The product launched last December but has yet to generate revenue from sales. Zymergen said in its IPO filing that the product is currently in the qualification process with multiple customers and commercial discussions are ongoing with some of them. The Zymergen pipeline totals 10 products: three in electronics, four in consumer care, and three in agriculture. New markets the company says it expects to enter in the future include food proteins, healthcare consumables, animal nutrition and health, natural resource extraction or remediation, and packaging.
Zymergen was founded in 2013. The company’s largest shareholder is SVF Excalibur with a 27.8% post-IPO stake, according to the prospectus. The filing states that the IPO proceeds will be used for working capital and other corporate purposes, including commercialization of its products. No specific uses of the IPO cash are detailed in the filing.
Rain Therapeutics raises $125M for cancer drug pipeline
Cancer drug development is moving towards therapies in which the treatment selected is based on the genetics of the disease. Rain Therapeutics is developing such therapies and its IPO raised $125 million to finance a pivotal test of its lead drug candidate.
Rain, a Newark, California-based biotech, offered more than 7.3 million shares at $17 each, the midpoint of its $16 to $18 per share price target. The company’s lead drug candidate, RAIN-32, is a small molecule that blocks mouse double minute 2 (MDM2), a protein that plays a role in the development of numerous cancers. In the IPO filing, Rain says the biological driver of a tumor is more important than the tumor type when it comes to selecting a treatment. For its clinical trials, the company plans to use genetic testing to select patients most likely to benefit from its experimental therapies.
Rain acquired global rights to RAIN-32 from Daiichi Sankyo last September. The Japanese pharmaceutical company had produced positive Phase 1 results in liposarcoma, a cancer affecting the body’s fat cells, as well as other solid tumors. In its IPO filing, Rain said that this research also validated a dosing schedule that mitigates safety concerns and widens the therapeutic window for blocking MDM2, which could expand the drug’s potential in MDM2-dependent cancers.
With the IPO proceeds, Rain plans to start a Phase 3 study in liposarcoma in the second half of 2021. A tumor-agnostic Phase 2 study in solid tumors is also slated to start in the second half of this year. A mid-stage study in intimal sarcoma is planned for early 2022. Rain is also developing a preclinical drug candidate that uses synthetic lethality to treat cancer by blocking RAD52, a protein that plays a role in cancer cell repair. The company says in the filing that it expects to select a lead candidate for this program in 2022.
Since Rain formed in 2017, it has raised more than $90 million, according to the IPO filing. Biotechnology Value Fund holds the largest post-IPO stake at 18.2%, followed by Boxer Capital’s 14.5%. Shares of Rain will trade on the Nasdaq under the stock symbol “RAIN.”
Impel Neuro heads to Nasdaq with $80M for migraine treatment
Migraine sufferers looking treatment options can choose from among an assortment of injectable and oral drugs. Impel Neuropharma aims to offer another choice: an inhaled medication administered by a device capable of delivery to the upper reaches of the nasal cavity for rapid absorption. The Seattle-based company is preparing for potential commercialization of its treatment and it now has $80 million in IPO cash to support its plans. Impel sold more than 5.3 million shares at $15 apiece, right at the midpoint of its targeted price range. Shares of Impel will trade on the Nasdaq under the stock symbol “IMPL.”
Impel’s nasal delivery technology is called POD, which is short for precision olfactory delivery. In its IPO filing Impel says that the technology is intended to offer injection-like outcomes in a non-invasive manner. Lead product candidate Trudhesa is a dry powder formulation of generic migraine drug dihydroergotamine (DHE) that is administered via POD. In clinical trials, Impel reported that its technology was able to achieve drug levels in the blood comparable to intravenously administered DHE, but more quickly and at a lower dose. Impel filed for FDA review. The agency has set a Sept. 6 target date for a regulatory decision.
Impel plans to apply $60 million of the IPO proceeds to the regulatory review process and the commercial launch of Trudhesa, if approved. The company has earmarked another $10 million for initial clinical tests of INP105, a formulation of the behavioral drug olanzapine for treating agitation in patients with autism spectrum disorder.
NeuroPace nabs $102M for commercialization of epilepsy device
NeuroPace, a company that has commercialized an implantable medical device that treats epilepsy, raised $102 million in its stock market debut. Mountain View, California-based NeuroPace initially planned to offer about 5.3 million shares in the range of $15 to $17 apiece. The company ended up boosting the size of the offering to 6 million shares, priced at $17 each. Those shares will trade on the Nasdaq under the stock symbol “NPCE.”
The implantable NeuroPace device is called the RNS System. In its IPO filing, the company said that the device continuously monitors the brain’s electrical activity and recognizes abnormal electrical activity specific to a patient. RNS responds in real time with electrical impulses to prevent seizures. The FDA approved NeuroPace’s product in 2013 and the company launched it the following year. As of the end of 2020, the company counted more than 3,000 patients who have been treated with RNS. The company says that its device provides an option for the estimated 575,000 adults in the U.S. whose epilepsy cannot be adequately treated by drugs, or those for whom the toxic effects drugs make such therapy unacceptable.
In 2020, NeuroPace reported $41.1 million in revenue from sales of RNS, about 11% more than the prior year. The company says in its prospectus it will use the IPO proceeds to expand its sales and marketing efforts and increase its research and development work.
Treace Medical lands $106.3M for bunion-correcting medical device
Treace Medical Concepts, an orthopedic medical device company that has commercialized technology that corrects bunions, raised $106.3 million from its IPO. Ponte Vedra, Florida-based Treace and certain stockholders in the company offered a combined 11.25 million shares for $17 apiece, which was the top end of its projected price range. Treace will not receive any proceeds from the shares offered by the selling stockholders. The company’s shares will trade on the Nasdaq under the stock symbol “TMCI.”
The Treace product, Lapiplast 3D Bunion Correction System, is a combination of instruments, implants, and surgical methods. In its prospectus, the company said its technology improves upon earlier bunion surgery methods by correcting the root cause of the deformity. The Treace product received FDA clearance in 2015. Since then, the company calculates that more than 25,0000 procedures have been performed with the system in the U.S. In 2020, Treace reported $57.3 million in revenue, a 45.5% increase over the prior year. In the filing, the company said that the main purpose of the IPO is to obtain additional capital to support its operations and establish a public market for its common stock.
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