IPO hopefuls swing for $126.5M and hope biotech's window stays open

After two consecutive quarters of mostly bullish biotech debuts, two drugmakers are lining up IPOs in hopes the market stays drug-friendly, seeking a combined $126.5 million to bankroll treatments for cancer and metabolic disease.

Stamford, CT's Loxo Oncology is aiming to raise $69 million in its public debut, money it will use to fund a promising early cancer candidate. The company's lead drug, LOXO-101, is a TRK-blocking compound currently in Phase I development, and Loxo believes it has potential in brain, lung, thyroid and breast cancers. A fleet of venture backers would seem to agree, as the company has raised about $57 million in less than a year from the likes of OrbiMed Advisors, New Enterprise Associates and Aisling Capital.

Separately, biotech startup Viking Therapeutics is looking to make $57.5 million in an IPO to support the pipeline it recently inhereted from partner Ligand Pharmaceuticals ($LGND). In a deal announced in May, Ligand handed Viking 5 assets and $2.5 million to help develop them. Leading the way is the Phase II VK0612, a Type 2 diabetes candidate that blocks the enzyme FBPase to hamper the body's ability to produce glucose, joined by the mid-stage VK5211, a selective androgen receptor modulator with potential to treat cancer-related muscle loss. Viking intends to spend its proceeds on trials for those two drugs along with preclinical work on three candidates for dyslipidemia, obesity and nonalcoholic steatohepatitis (NASH).

The two join a new crop of drug developers filing for IPOs this week and hoping to extend biotech's honeymoon on Wall Street, including Auris Medical, Avalanche Biotechnologies and Viamet Pharmaceuticals, three outfits seeking nearly $250 million combined. Also in the queue are Tobira Therapeutics, Immune Design, Zosano Pharma, Ocular Therapeutix and Atara Biotherapeutics.

Meanwhile, the roiling market for biotech IPOs that helped 29 biotechs go public in the first quarter has since taken a volatile turn. The industry pulled off 16 debuts and $1.2 billion in Q2, but many of those companies limped out of the gate with deeply discounted offerings, and a few had to postpone their raises entirely.

- here's Loxo's S-1
- read Viking's filing

Special Report: Biotech's breathless quarter of IPOs brings in $2.1B for R&D