Print“Despite Fate’s weak IPO, the 40 life sciences companies that have gone public in 2013 have raised more than $6 billion.”
Fate Therapeutics became the 40th life sciences company to complete an initial public offering on a U.S. exchange this year, but slashed its price and boost the number of shares to do so.
Fate went public on October 1, raising $40.2 million by offering 6.7 million shares at $6 a share, the low end of its revised target range of $6 to $8. It had originally hoped to raise $60 million by offering 4 million shares for between $14 and $16, but changed the terms the day before completing the offering. According to its revised filing, existing investors Venrock, Polaris Venture Partners, and ARCH Venture Fund VI had expressed an interest in buying $15 million of the offering.
Fate has developed a platform to modulate adult stem cells to treat orphan diseases. Its lead asset, ProHema, is in mid-stage testing for adult hematological malignancies.
Fate’s difficulties completing its IPO come after Prosensa, a biotech developing RNA-modulating therapies for genetic diseases, made investors aware of the inherent risk of the newer therapeutic approaches last month. The Dutch biotech priced its offering at $13, the top of its target range, and rose to a high of $34.55 in a little more than a month. But the stock plunged in September when its experimental drug for Duchenne muscular dystrophy in a late-stage test failed to show statistically significant improvement in patients’ abilities to walk compared to a placebo. The shares fell 70 percent on the news, and ended September at $6.61 a share, about half its IPO price.
Still Prosensa’s troubles didn’t dampen enthusiasm for Foundation Medicine and Ophthotech from pricing above its target range and soaring post-IPO. Foundation had a marketed product and Ophthotech’s late-stage experimental drug for wet-AMD has shown promising results when compared to the standard of care treatment Lucentis. Investors saw these companies as much less risky.
Despite Fate’s weak IPO, the 40 life sciences companies that have gone public in 2013 have raised more than $6 billion, including the $2.6 billion raised by Pfizer’s animal health spinout Zoetis. As a group they were up an average 57 percent over their IPO price at the end of September.
Fate Therapeutics began trading at $6.61 a share and ended the week at $7.15 a share, up 19.2 percent from its IPO price.
October 04, 2013
http://www.burrillreport.com/article-fate_therapeutics%e2%80%99_ipo_comes_in_below_initial_target.html
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