Alector and Stealth Bio aim high with pricings of their IPOs

Wall street bull color
Both Alector and Stealth Bio made their IPO intentions known at the top of the year. (Alexander Naumann/Pixabay)

The state of the appetite for biotech IPOs in the new year, so far, appears to be strong—even in the notoriously recalcitrant field of Alzheimer’s disease research, with immuno-neurology developer Alector shooting for a $176 million listing.

And at the same time, Stealth BioTherapeutics plans to raise $81 million for itself, to help fund studies of its late-phase asset in multiple indications related to mitochondria dysfunction.

Alector, a former Fierce 15 winner, set the terms of its Nasdaq offering after taking its pitch around the J.P. Morgan Healthcare conference earlier this month. It plans to sell 9,250,000 shares of common stock at $19.00 per share, under the symbol ALEC, according to the South San Francisco-based company.

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That would add up to significantly more than Alector’s previously announced target of $150 million in early January, and follows a $133 million series E raise from the middle of last year.

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Instead of focusing on the build-up of proteins in the brain, Alector’s approach targets immune dysfunction as a root cause of degenerative brain disorders, such as Alzheimer’s and dementia. Its two lead candidates are currently in phase 1 trials, and the company plans to move its frontotemporal dementia candidate, AL001, into a phase 1b study by the middle of this year, and into phase 2 by mid-2020.

Stealth similarly made its intentions known at the top of the year, although its current $81 million target falls short of their earlier plans for an $86 million IPO.

The Newton, Massachusetts-based biotech plans to offer 6.2 million American depository shares ranging in price from $12 to $14, using the Nasdaq ticker MITO. According to Renaissance Capital, the midpoint of that range would give Stealth a market value of $430 million.

RELATED: M&A, IPOs and VC raises—Biotech and medtech executives look to their crystal balls for 2019

The company hopes the proceeds will support the development of its peptide elamipretide, including a phase 3 trial in primary mitochondrial myopathy and a planned phase 2b study in dry age-related macular degeneration, neither of which have an FDA-approved treatment. The money would also advance its preclinical drug SBT-272 into phase 1, for neurodegenerative diseases.

Elamipretide targets cardiolipin, found on the inner membranes of mitochondria, to increase their respiration and production of adenosine triphosphate, ultimately providing more energy for cell function.

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