Corvus offers IPO at a discount as headwinds persist

Corvus Pharmaceuticals has priced its IPO at just $15 per share--the lowest range it could offer--as 2016 continues to produce a mixed bag of results for biotechs going public.

The CA-based clinical stage biopharma company, which is currently working on new immuno-oncology therapies, said the pricing of its initial public offering (IPO) of 4.7 million shares will be priced at just $15 per share.

This is at the end of the $15-$17 range it said it wanted earlier this year, with the IPO reaching $71 million instead of the $80 million they could have asked for.

Corvus, which will list on the Nasdaq under the symbol "CRVS," began life two years ago when it was co-founded by former Pharmacyclics execs Richard Miller and Joseph Buggy and OrbiMed partner Peter Thompson.

It closed a $33.3 million Series A round in 2015 and raised a further $74.8 million more in September from a syndicate that includes OrbiMed, Novo A/S, Roche ($RHHBY) Venture Fund and Fidelity.

With the funds, Corvus plans to push forward with four cancer therapies in early development. The most advanced, CPI-444, targets one of the body's G protein-coupled receptors to help the immune system home in on cancers, and Corvus began a Phase I trial in patients with solid tumors in January.

This offering comes at uncertain times for IPOs as macroeconomic forces--such as slumping oil prices, a China slowdown and concerns over a global recession--all combine to batter the confidence of investors. Some analysts believe that getting an IPO at all should be seen as a positive in the current environment.

The year began with a drought as industry indexes slumped and investors seemed to lose interest in drug developers. Genghis Lloyd-Harris, a partner at Abingworth, believes that getting IPOs away in 2016 will remain tough: "Although the IPO window is not hermetically sealed, you better have outstanding insider support to get an IPO away in the U.S.," he recently told analysts at EP Vantage.

But successful February offerings from Editas Medicine ($EDIT) and BeiGene ($BGNE) showed a slight calming of the winds for biotech, with a handful of other companies managing to make their way to Wall Street in the weeks since.

Britain's Shield Therapeutics best sums up the current environment: It gained a U.K. IPO last month, raising £32.5 million ($47 million)--but it was originally expecting to make nearly four times that amount, and had to delay its IPO by 6 months given market volatility at the end of 2015. It also abandoned its original plan to list on the LSE in favor of the junior Aim market.

It got the IPO, but nowhere near the amount it had originally wanted; this will likely be a common theme for a number of biotechs in the coming months. 

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