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| Patrick Soon-Shiong |
While there have been a smattering of biotech IPOs this year, med tech IPO activity has remained quiet. But that's changed quickly--with a $91 million IPO for precision medicine player NantHealth and another $50 million IPO for drug-device ophthalmic company Clearside Biomedical ($CLSD) pricing on June 1.
NantHealth ($NH) was up about 40% in early trading on June 2 to almost $20 after pricing at $14, the midpoint of its anticipated range, and selling 6.5 million shares. But the offering was heavily supported by existing shareholders.
Between them, NantHealth chairman and CEO Dr. Patrick Soon-Shiong and its strategic investor Celgene ($CELG) committed to buying up to $70 million, or 77%, of the IPO. In the end, the required support was a bit less--Celgene purchased about $43 million of the IPO with Soon-Shiong buying up roughly $5 million.
Soon-Shiong has had a mixed reception on public markets. Another one of his companies, immunotherapy player NantKwest ($NK), went public in July 2015 but has seen its valuation dwindle from almost $2 billion to about $650 million.
Investors are also obviously unconcerned about legal allegations of fraud on behalf of NantHealth. It is the subject of an ongoing whistleblower lawsuit brought by a pair of former employees who had been tasked with taking the company public last year. According to the lawsuit, they "soon discovered that (NantHealth execs) were engaged in a multitude of fraudulent activities, which would, if known to investment bankers, customers and the public, … substantially devalue the company's stock and likely cause the end of the IPO."
With the IPO cash in hand, NantHealth expects to focus on its adaptive learning system, CLINICS, in the cause of moving from traditional fee-for-service to value-based models as well as toward the use of molecular and biometric data in medicine. CLINICS is purported to collect, index, analyze and interpret billions of molecular, clinical, operational and financial data points from various sources.
It will also work to support its systems infrastructure NantOS and its Genomic Proteomic Spectrometry Cancer, or GPS Cancer. It in-licensed the latter from another Soon-Shiong company, NantOmics. GPS Cancer is intended to enable diagnosis at the molecular level by measuring the whole genome and proteome of an individual patient to predict therapeutic response.
For its part, Clearside Biomedical raised $50 million by selling 7.2 million shares at $7, which was well below its previously proposed range of $14 to $16. The company plans to use its IPO proceed primarily to back Phase III testing of its two lead products, CLS-1001 and CLS-1003. Both are ophthalmic drug-device combo efforts utilizing a microinjector, the former in uveitis and the latter in retinal vein occlusion.
Clearside traded up about 13% in early trading on June 2 to about $8.
- here is the NantHealth prospectus
- and here is the Clearside Biomedical prospectus