Dermatology drug developer Aclaris Therapeutics ($ACRS) priced its IPO well below its expected range, raising $55 million as a prolonged bear turn has dampened Wall Street's appetite for biotech debuts.
The company moved 5 million shares at $11 apiece, coming in short of its $14-to-$16 projections. Aclaris is also offering another 750,000 shares to underwriters over 30 days, setting the maximum deal value at more than $60 million.
Aclaris' IPO follows a $40 million Series C fundraise last month, cash the company is putting toward a pipeline of topical treatments for skin disorders. Leading the way is A-101, which treats a nonmalignant skin tumor called seborrheic keratosis, or SK. After a trio of Phase II successes, A-101 is slated to enter three Phase III trials in the first quarter of next year, Aclaris said, on track for an FDA submission by the end of 2016. The company is also mapping out a Phase II program for A-101 as a treatment for warts.
In September, Aclaris broadened its pipeline by trading $8 million up front for the rights to some early-stage JAK inhibitors from Rigel Pharmaceuticals ($RIGL), which the company plans to develop as treatments for alopecia.
But, like most biotech debutantes of late, Aclaris will be pressing forward with less money than it wanted. A market downturn, spurred by concerns about drug pricing and a handful of clinical failures, has cut into IPO valuations. Over the past few weeks, Nabriva Therapeutics ($NBRV), Edge Therapeutics ($EDGE) and Mirna Therapeutics ($MIRN) all priced below their expected ranges. Others, like Shield Therapeutics, have put off plans to go public altogether.
Whether the recent weakness among biotech stocks is a blip in the now years-long bull run or the first sign of a major correction remains to be seen, but it hasn't stemmed the rush of drug developers angling to go public. MyoKardia, a 2015 Fierce 15 honoree, filed for an $86 million IPO late last month, joining a queue that includes Dimension Therapeutics, Acacia Pharma and Cortendo.
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