Biotechs launch an IPO blitz as Nasdaq stumbles out of the gate

Nasdaq started off 2016 by stumbling out of the gate on Monday, taking a nasty hit along with the other major stock indexes as jitters about the Chinese market rattled investors once again. But 6 different biotechs shrugged off the chill that has afflicted industry stocks for months and filed IPOs which are collectively looking to raise hundreds of millions of dollars in the new year.

Editas Medicine, which has been pioneering CRISPR/Cas9 gene editing tech, topped the IPO list in terms of public profile, looking for at least $100 million as it sought to gain another big round of financing even before its first clinical trial had begun. And it was joined in the first-day 2016 IPO rush by Syndax, Bavarian Nordic, Audentes, Corvus and Reata.

Cambridge, MA-based Editas has earned more attention than most upstarts, but it has yet to test its therapeutic theories on people.

"We have not initiated clinical development of any product candidate and expect that it will be many years, if ever, before we have a product candidate ready for commercialization," Editas noted soberly in its S-1. And the company's ongoing patent disputes with two of the scientific founders of the field, Emmanuelle Charpentier and Jennifer Doudna--allied with rivals that include Intellia, Caribou and CRISPR Therapeutics--also warranted a red flag for investors to consider.

Look past an expected 2017 jump into the clinic, though, and Editas painted a bright picture of CRISPR/Cas9's prospects, with its DNA-snipping tech capable of affecting many of the thousands of diseases caused by genetic mutations. 

Here's a snapshot of the other IPOs:

  • Waltham, MA-based Syndax, which had to scrap an earlier IPO, came back with an $86 million pitch. The biotech is betting that its Big Pharma CEO, AstraZeneca vet Briggs Morrison, and a range of new deals would help warm investors to its IPO. On Monday, Syndax added a pact with Pfizer ($PFE) and Merck KGaA combining its HDAC inhibitor entinostat with avelumab. The cancer drug is also being paired with Merck's Keytruda, another checkpoint drug, with a separate study lined up in combination with Roche's star checkpoint drug atezolizumab.
  • The Danish biotech Bavarian Nordic is also making the trek to Nasdaq with an $86 million IPO. Unlike most of the biotechs filing an IPO, Bavarian Nordic actually has revenue to boast about, in this case from a smallpox vaccine. The biotech also has a late-stage cancer vaccine, Prostvac, in development, though there are a number of skeptics among the analysts who follow the program.
  • We reported back in October that it looked like San Francisco-based Audentes Therapeutics looked IPO-bound when it hauled in a $65 million venture round from a list of investors that included a number of classic crossover groups. Audentes acquired Cardiogen Sciences, grabbing a lead program for the CASQ2 subtype of catecholaminergic polymorphic ventricular tachycardia (CASQ2-CPVT) with plans to hustle it into clinical development. Two other therapies, AT001 for the treatment of X-linked myotubular myopathy and AT002 for the treatment of Pompe disease, are also in the works as Audentes pursues an $86 million IPO.
  • Corvus Pharmaceuticals in Burlingame, CA, meanwhile, is betting that the current wave of attention for immuno-oncology will steer its $115 million offering to a successful debut. The ex-Pharmacyclics execs running Corvus are planning to put an oral therapy into the clinic this year, targeting the A2A receptor for adenosine, an immune checkpoint. Corvus took the wraps off a $75 million crossover round last fall. 

And finally, there's Reata Pharmaceuticals, the Dallas-based biotech which struck two of the richest partnering deals in biotech history with AbbVie ($ABBV), only to see the lead program disintegrate. Reata is in search of an $80 million IPO as it looks for a new role for its lead therapy, bardoxolone methyl, which has been in Phase II clinical development for the treatment of pulmonary arterial hypertension, or PAH. The biotech is currently planning a Phase III for the therapy

Biotech stocks have been suffering ever since the Turing scandal prompted Hillary Clinton to raise the specter of price controls on Twitter. That drove generalists out of the market. This new wave of IPOs will provide a clear test on the market's appetite for biotech, and whether others in the industry will follow suit.