Zafgen, Ardelyx bank $156M in IPOs, recalling biotech's winter boom

The market for biotech IPOs has largely cooled since a first-quarter explosion brought in more than $2 billion, but drug developers Zafgen and Ardelyx ($ARDX) managed to turn back the clock in their debuts, cashing out for a combined $156 million.

Zafgen, maker of a promising obesity treatment, flipped 6 million shares at $16 each, grossing $96 million and hitting the Nasdaq as "ZFGN." The company's lead candidate is beloranib, a drug that blocks a bodily enzyme involved in fatty acid production. In a midstage study, beloranib came through with stellar results, helping one patient group lose an average of 22 pounds in 12 weeks. With its IPO proceeds, the biotech plans to mount late-stage studies of its drug in subpopulations, aiming to pick up initial approvals in rare diseases before taking the plunge on a big, costly obesity trial.

On the same day, Fremont, CA's Ardelyx moved 4.3 million shares at $14 apiece, banking about $60 million that'll help move along its unpartnered pipeline. Ardelyx's most advanced candidates are already tied up in 9-figure deals with AstraZeneca ($AZN) and Sanofi ($SNY), and while the biotech is getting a steady stream of milestone cash from those efforts, it's going public to raise money to support its preclinical candidates and gut-based discovery platform. Ardelyx has a slate of early assets to treat inflammatory bowel disease, the kidney disease hyperkalemia and blood fluid overload, all based on its in-house APECCS system.

The two pricings come on the heels of an above-the-range debut by ZS Pharma ($ZSPH), which banked $107 million on Wednesday for its kidney treatments.

That could be cause for optimism among biotechs hitting the road with hopes of going public, a welcome change after some stumbling Wall Street debuts by Alder Biopharmaceuticals ($ALDR), Cerulean ($CERU) and Agile Therapeutics ($AGRX), all of which had to take a discount to get out. After the first quarter saw nearly 30 drug developers pull off IPOs, even well-regarded drug developers have had trouble convincing investors to wager on the high-risk business of drug development.

- read Zafgen's note
- here's Ardelyx's statement

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