Biotech fledglings crowd into a still-sizzling market for IPOs

These days, a biotech can never be too young for an IPO. Case in point: Boulder, CO-based Nivalis Therapeutics ($NVLS) rode the hot market for biotech IPOs to a $77 million windfall, banking on a very early-stage cystic fibrosis effort that's looking to ride on the coattails of a new combo therapy from Vertex ($VRTX).

Nivalis boosted the number of shares on offer to 5.5 million, selling the shares at $14--in the middle of its projected range. As of Thursday morning, the biotech's shares were trading up a bit, at $14.83. 

Cystic fibrosis is caused by mutations in the CFTR gene, which Vertex has helped address with the pioneering combo lumacaftor/ivacaftor (Kalydeco), which was recently endorsed by a panel of outside experts recruited by the FDA to evaluate the drug application. Nivalis says that it's seeking to prove that its lead drug, N91115, is a CFTR stabilizer that can amp up the efficacy of the Vertex combo. And investors appeared ready to buy in, despite the lack of clinical data to back it up.

There's been a growing appetite for early-stage biotechs, though, which has opened the door to companies like Nivalis. That trend has been underscored time and again in recent months, as the IPO window has remained open now for more than two years. The entry of companies like Axovant ($AXON), which recently parlayed a $5 million drug deal into a $2 billion company, has stoked debate over whether the industry is seeing a sustainable drug market or a bubble that's swelling rapidly.

Austin-based Aeglea BioTherapeutics, though, isn't waiting to find out. The biotech is looking to follow the same approach as Nivalis, filing for an $86 million IPO on Wednesday. The University of Texas spinout is working on a new approach to degrade specific amino acids in the blood, which could have an impact on some cancers.

Aeglea is at an even earlier stage of development than Nivalis. The biotech just filed its IND for a lead drug--and now investors are being wooed to come in for the high-risk ride ahead.

- here's Aeglea's S-1