Alto, Fractyl head to public markets with IPOs north of $100M each

In a second busy week of biotech IPOs, Alto Neuroscience and Fractyl Health will both be jumping onto the public markets this morning with their sights set on raking in more than $100 million each.

Alto unveiled ambitions earlier this week to bring in around $100 million by selling 6.7 million shares on the New York Stock Exchange priced between $14 and $16. Yesterday evening, the precision psychiatry biotech revealed that the expected offering has been boosted to 8.04 million shares at $16—the upper end of the expected range.

This upsized offering should bring in gross proceeds of $128.6 million, the company explained in a Feb. 1 release. However, this haul could grow by another $20 million if underwriters fully exercise their 30-day option to buy up to 1.26 million additional shares.

Alto’s pipeline focuses on tackling depression, with three clinical-stage programs on the go. The lead program, ALTO-100, was acquired from Palisade Bio and is progressing through a phase 2b trial in patients with major depressive disorder, with top-line data set for the second half of the year. 

A runner-up depression program, ALTO-300, launched into phase 2b development last June with top-line data expected in the first half of 2025. The biotech is homing in on treating patients who are positive for an EEG biomarker identified using machine learning, pointing to early data suggesting a larger benefit in that subset of patients. 

Meanwhile, Fractyl Health’s offering—listing 7.3 million shares on the Nasdaq at $15 apiece—is squarely in the middle of the company’s estimates last week. This should bring in $110 million in gross proceeds, which could rise by $16.3 million should underwriters take up their 30-day option to buy an additional 1.09 million shares.

The Lexington, Massachusetts-based biotech announced in December 2023 that a potential IPO could be near, with the proceeds earmarked to complete a 1,000-person study of an endoscopic procedure called Revita to back up a planned U.S. approval application. Funds would also go toward continued preclinical development of GLP-1-based pancreatic gene therapy Rejuva.

Both Alto and Fractyl’s shares will start trading on their respective stock markets this morning under the tickers “ANRO” and “GUTS.” The companies’ leadership will likely be hoping that they receive a similarly warm reaction as CG Oncology, which saw its stock almost double in value in the opening day of trading last week.

Waiting in the wings is Kyverna Therapeutics, which said yesterday that it hopes to bring in around $180 million from an IPO, although the autoimmune cell therapy biotech has yet to set out the final terms of the offering.

Analysts told Fierce Biotech last week that the successful public market debuts of CG and ArriVent suggested the biotech sector will be going through a “recovery phase” this year.