The Burrill Report

The quiet period for biotech IPOs is officially over with five companies completing initial public offerings at the end of January, as biotech continued to outperform the general markets. Their strong debut follows 2013 when 46 drug developers completed IPOs in the United States, raising $3.55 billion, and ended the year on average up 50.1 percent.

RNAi-based drug developer Dicerna Pharmaceuticals priced its upsized IPO at $15 a share, 25 percent above the midpoint of its $11 to $13 target range, to raise $90 million. Shares opened their first day of trading at $30 and kept on climbing, ending the day at $45.50, up 203.3 percent. It was the largest opening day gain of any biotech IPO in at least nine years. Watertown, Massachusetts-based Dicerna plans to begin clinical testing of its experimental compound targeting MYC to treat hepatocellular cancer and other solid tumors in the first half of 2014. Two of its programs in solid tumors are exclusively licensed to Kyowa Hakko Kirin.

UltraGenyx Pharmaceuticals repeated Dicerna’s success one day later. The developer of therapies for rare genetic metabolic diseases raised $121 million in an upsized IPO priced at $21 a share, 7.7 percent above the midpoint of the target range, and upped the number of shares offered by 1 million to 5.8 million shares. Novato, California-based UltraGenyx’ pipeline includes five experimental compounds in development with its most advanced product, an extended-release formulation of sialic acid, in mid-stage testing for hereditary inclusion body myopathy. The biotech also soared in its trading debut, ending first day of trading up 101.2 percent.

Cara Therapeutics priced its IPO at $11 a share, the low end of its target range, to raise $55 million. The company’s intravenous treatment for acute pain is set to begin late stage testing. Cara ended its first day of trading up 17.4 percent.

Celladon and Trevena also completed initial public offerings. Both companies had planned to IPO in November but had postponed their offerings when generalist investors cooled their interest in the sector. Both companies amended their offerings, dropping the price and raising the number of shares offered. Celladon raised $44 million, 41.3 percent below what it had expected to raise in November. Shares of the biotech, which is developing a gene therapy for heart failure that is in mid-stage development, ended the month up 5.9 percent.

Trevena completed its IPO as January came to a close, raising $64.8 million through the sale of 9.3 million shares at $7 a share. The company, which is developing therapies for heart failure and pain, priced 46.2 percent below the midpoint of its initial target range, and raised the number of shares offered by 60.3 percent.

With another nine companies having set their terms and started their roadshows, another round of IPOs is likely in the next couple of weeks The strong start for Biotech IPOs in 2014 reflects not only continued interest in the sector but the fact that biotech is outperforming the general markets. The Burrill Biotech Select Index ended January up 8.3 percent for the month while the Nasdaq fell 1.7 percent, the Dow dropped 5.3 percent, and the S&P 500 lost 3.6 percent in the comparable period.



January 31, 2014
http://www.burrillreport.com/article-biotech_ipos_off_and_running_.html