Proteostasis and AveXis test the troubled IPO waters as biotech valuations wane

A pair of early-stage biotech companies has joined the thinning queue of drug developers trying to go public amid a painful market correction, angling to raise more than $135 million combined as the industry sputters.

The Illinois-headquartered AveXis is looking to raise $85 million at midpoint, offering roughly 4.3 million shares at between $19 and $21 apeice and planning to trade on the Nasdaq as "AVXS." With the funds, the company aims to invest in AVXS-101, a Phase I gene therapy for the rare and debilitating spinal muscular atrophy. AveXis closed a $65 million D round last year to pay for Phase I, and the company is now planning to sit down with regulators in the first half of this year with the goal of launching a pivotal trial for its gene therapy in 2017.

And Cambridge, MA's Proteostasis Therapeutics, developing treatments for cystic fibrosis, is looking to price about 3.9 million shares at between $12 and $14 each, planning to list on the Nasdaq under the symbol "PTI." At midpoint, the IPO would gross about $50 million, funds the company has earmarked for PTI-428, a Phase I treatment that Proteostasis believes can work alongside Vertex Pharmaceuticals' ($VRTX) high-profile CF drugs to improve results for patients with the disease.

Each company is wading into a choppy market for biotech IPOs, as the frothy markets of the past few years have since soured, leading to a flurry of deeply discounted offerings in the fall and an altogether halt at the end of 2015. Meanwhile, Wall Street's view of the industry as a whole has continued to dim, with the major indexes of biotech stocks slipping further in January amid concerns about drug pricing and valuations.

Coming down the pike are two offerings expected to set the tone for 2016: Editas Medicine's effort to raise $122 million in an IPO, and BeiGene's pitch to bring in as much as $150 million in a jump to the Nasdaq. Both are expected to price this month, and the relative success of each IPO will go a long way in shaping the narrative for biotech this year.

- read the AveXis S-1
- here's Proteostasis' filing

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