Big Pharma-backed Merus and preclinical PhaseRx slash IPOs

Nasdaq Tower

Bispecific cancer antibody biotech Merus--which has the backing of some major Big Pharma names--has severely discounted its IPO, with preclinical microcap PhaseRx following suit.

Utrecht, the Netherlands-based Merus had originally been seeking a $100 million IPO last month (which was still considered low given that backers Novartis ($NVS), Johnson & Johnson ($JNJ) and Pfizer ($PFE) were expected to buy half its shares)--but this has been cut nearly in half as it raised just $55 million by offering 5.5 million shares at $10.

Merus--which is planning to list on the Nasdaq as $MRUS--originally planned to offer 4.3 million shares at a range of $14 to $16. Its new market cap of $158 million is a 29% discount to the one proposed when the company set terms.


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And the ongoing biotech IPO headwinds have also hit PhaseRx, a tiny preclinical biotech developing treatments for inherited enzyme deficiencies in the liver. It raised $19 million by offering 3.7 million shares at $5--the low end of the range of $5 to $7, and much lower than the $30 million it had gunned for when its IPO plans were announced late last month.

Merus’ lead candidate, MCLA-128, is currently in a Phase I/II clinical trial in patients with HER2-expressing solid tumors. It is also moving several other candidates down the pipeline, including MCLA-117, which began a Phase I/II study in patients with acute myeloid leukemia this month.

Meanwhile, PhaseRx has said previously that it will use any IPO cash to help pay toward further research in its targets for inherited enzyme deficiencies in the liver, as well a condition known as urea cycle disorder, which can lead to excess ammonia in the blood.

The Seattle biotech said it is seeking to undertake further preclinical work with its candidates and scale up its manufacturing. It’s been funded primarily through a series of private placements and has raised around $47.4 million to fund its operations. It too will list on the Nasdaq, and has chosen the ticker $PZRX.

This comes at a topsy-turvy time for the IPO market, with GenSight, Bavarian Nordic and BioCardia all ditching their IPOs in the last few months with other biotechs also being forced to lower their ranges in order to get their offerings away.

But some others--notably those in the gene editing space such as Intellia Therapeutics--have managed to gun for the top range of their IPOs.

- see Renaissance Capital’s take on Merus’ and PhaseRx's IPOs

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