Despite facing one of the worst markets for biotech stocks in recent memory, Editas Medicine has taken another big step forward in its quest to raise some big bucks through an upsized IPO. The Cambridge, MA-based biotech noted that it will seek up to $122 million through the sale of 6,785,000 shares at $16 to $18 per share.
The market's reception to this high-profile offering is likely to offer a bellwether case for the rest of the biotechs lining up in the IPO queue. Success would signal at least a shot at a new batch of IPOs, while a defeat would be marked as a setback for the industry, forcing many more companies to likely wait out the turbulence.
Cambridge, MA-based Editas' IPO pitch was bundled in with a batch of 6 new offerings filed on the first market day of the year. Since then, though, the market uncertainty has dealt with biotech stocks in a cruel fashion, driving down the Nasdaq biotech stock index ($IBB) and eliminating all the gains made last year.
Nevertheless, the index price is still twice what it was three years ago, as the IPO window lifted and dozens of biotechs made the leap onto the public market. And Editas has a few advantages in pursuing its quest, debuting the hot new gene editing technology that has been making the cover of every science publication in the world. A big batch of crossover investors which helped get Editas to this point is also ready to throw their collective weight behind the IPO.
One downside: The company is still a long way from its first human testing. And the ongoing patent war along the pioneers in gene editing, which uses new tools to cut and splice DNA in pursuit of potential cures for patients.
"Investors in biotech darn well know that this is fraught with investment danger," Paul Leiman, who teaches the business law of biotechnology at Johns Hopkins University's Carey Business School, told FiveThirtyEight in the latest in a long string of in-depth articles about CRISPR/Cas9.
The celebrated scientific duo Jennifer Doudna and Emmanuelle Charpentier won a host of accolades for their work, which has spawned companies like Intellia and CRISPR Therapeutics, also based in Cambridge, MA. Editas is relying, in part, on the disputed patents of MIT's Feng Zhang, who recently has been patenting potential upgrades to the technology.
- here's the SEC filing