UPDATED: Epizyme scores latest biotech IPO victory to advance cancer pipeline
Epizyme ($EPZM) has become the latest IPO success story from a growing market for public debuts in biotech. The Cambridge, MA-based developer of targeted cancer drugs sold about 5.9 million shares for $15 per share when including the 771,300 shares granted for over-allotments, hitting the high end of its proposed $13-$15 per share price range and exceeding previous fundraising targets for the offering.
The company roared into action on the Nasdaq on its first day of trading Friday, soaring 53.27% to $22.99 per share at the close of trading.
Epizyme, a 2011 Fierce 15 company, plans to invest in advancing a young pipeline of small molecule drugs against epigenetic enzymes in the cancer field. Though the company has yet to report results from a Phase I study of its lead drug candidate, the executive team led by CEO Robert Gould and CFO Jason Rhodes has an aggressive strategy for rapidly advancing its compounds through development and a roster of corporate partners such as Celgene ($CELG), Eisai and GlaxoSmithKline ($GSK).
Three or four years ago, public investors might have balked at a company not quite finished with early-stage development of unproven compounds. Yet 2013 has been a comeback year for biotech IPOs, which are expected to easily dwarf the 10 completed maiden public offerings in 2012 and abysmal totals since the late-2008 financial meltdown. And Epizyme's predecessors in the cancer field have shown that molecularly targeted medicines that offer early proof of efficacy can indeed race through clinical development. So investors won't have to wait long to see how well the drugs work.
Epizyme's lead candidate, called EPZ-5676, entered Phase I development in September for patients with a lethal subtype of acute blood cancers known as mixed lineage leukemia (MLL). Celgene grabbed rights to the compound for outside of the U.S., with Epizyme retaining control of its domestic market. The compound targets DOT1L histone methyltranferase, which is part of a 96-member class of epigenetic enzymes.
Epizyme has banked on drugs against these HMT enzymes and so far the strategy has panned out on the fundraising front. The company's three venture rounds brought in $76 million, its deal revenue hit $120 million, according to an SEC filing, and now the IPO could reach $88.7 million if underwriters purchase all of the shares for over-allotments.
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Editor's note: This story has been updated to clarify the conditional element of the over-allotment share purchases and the total potential amount of the offering.