These days there are two kinds of biotech IPOs that make it to the market: The select few solid successes in line with the range and some bargain selections that provide a haircut on the price, where the company ups the number of shares but sells at a significant discount to the range. Another group are just quietly leaving their IPOs on the shelves or pulling out altogether to wait out the storm.
Today the industry has a mixed pair to consider. Proteostasis opted for the haircut, taking $8 a share--painfully far below the $12 to $14 range--but landing close to the target fundraising it had in mind by bumping up the number of shares on offer and bringing in $50 million. And AveXis hit the midpoint in the range, pricing its shares at $20 with the help of investors who had signaled their willingness to snap up about a third of the 4.75 million shares on offer.
Cambridge, MA-based Proteostasis has been making the case that it has a drug that can lend a hand to the newly approved therapies from Vertex for cystic fibrosis, which target defects in CFTR function. PTI-428, the biotech says, can make the Vertex drugs works better--but it only has preclinical in vitro data to make its case. And while it's laid out a timetable to put the oral drug through its paces with human subjects, that kind of risk doesn't sell so well on Wall Street after biotech stocks have taken a sound beating in recent weeks.
Just making it to Nasdaq under these circumstances is an achievement for Proteostasis ($PTI), but investors weren't in a celebratory mood today. The biotech's stock immediately plunged 26% as trading began, signaling tough sledding ahead for other offerings.
Chicago-based AveXis, though, could claim a hit with its offering. The company has attracted a solid set of investors--including Roche ($RHHBY)--interested in its gene therapy for rare cases of spinal muscular atrophy. Like many of the other biotechs in the gene therapy field, the company relies on an AAV vector to deliver a fix, in this case a working copy of a survival motor neuron gene needed to spur production of missing SMN protein.
It's still early days, though, with only a handful of patients in Phase I. Now AveXis has $95 million more to fund its work.
Their experience is likely going to continue to encourage at least a few more offerings. Biotech IPOs appear all but shut out of the London market right now, with investors turning a cold shoulder to the high failure rates and swooning valuations in biotech at a time of considerable global unrest. But Editas ($EDIT) and BeiGene ($BGNE) proved just days ago that loyal investors and an appealing story about new tech can still win out on Nasdaq--for now.