San Diego-based biotech Receptos has priced an initial public offering of 5.2 million shares at $14, raising $72.8 million as the company closes in on late-stage development of its lead candidate for multiple sclerosis.
Receptos expects to begin trading today on the Nasdaq Global Market under the symbol "RCPT."
The 5-year-old company aims to compete in the blockbuster market for oral drugs against MS, an incurable disorder that causes nerve damage in the central nervous system and disability, with an S1P1R small molecule modulator called RPC1063. Next year the biotech group expects to report data from the midstage portion of a Phase II/III trial for the candidate in patients with relapsing MS. The late-stage portion of the study could take off in 2013, according to a regulatory filing.
Analysts expect the market for oral MS therapies to explode over the coming years as new pills take the place of injected therapies for many patients. Industry giants dominate the field. The biotech heavyweight Biogen Idec ($BIIB) won FDA approval of Tecfidera in March and expects to rival Gilenya from Novartis ($NVS) and Sanofi's ($SNY) Aubagio.
To complete the public debut, Receptos settled for a price on the low end of its proposed $14-$16 range. Yet the company boosted the number of shares from 4.7 million to 5.2 million. Underwriters have the option of buying 780,000 more shares.
Receptos beat the odds in pricing within its range, as many biotech groups fail to do. And the company has provided some IPO bragging rights to its venture investors such as Arch Venture Partners, Flagship Ventures, Venrock Associates, Polaris Venture Partners and Eli Lilly's ($LLY) Lilly Ventures.
Receptos has built much of its pipeline with technology for discovery of drugs for targeting G-protein coupled receptors (GPCR) from Scripps, where founders Raymond Stevens and Hugh Rosen developed the platform with NIH support.
The company is developing its lead GPCR drug, RPC1063, for both MS and inflammatory bowel disease in separate midstage studies. This year the developer in-licensed an IL-13 antibody from AbbVie ($ABBV), targeting a Phase II study of the candidate for treating a rare respiratory ailment called Eosinophilic esophagitis, with AbbVie holding onto an option on the drug.
The company also scooped up the cancer-focused biotech startup Apoptos in May 2009. William Rastetter, the former executive chairman of Biogen Idec and past Venrock partner, serves as chairman of Receptos and was previously CEO of both Receptos and Apoptos.
- here's the release
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