IPO price: $15
Oct. 23 closing price: $19.44
Percentage gain: 30%
Intercept ($ICPT) achieved a feat very few biotechs have accomplished, going public at the high end of its proposed IPO range of $13 to $15 per share earlier this month and then trading up more than 20% out of the gate. And Intercept's early stock market performance has provided a flash of hope for other drug developers angling to go public.
What has investors jazzed about New York-based Intercept? The company boasts a novel drug called obeticholic acid (OCA) in late-stage development as a second-line treatment for primary biliary cirrhosis, which causes toxic levels of bile to accumulate in the liver. Dainippon Sumitomo came up with $15 million in upfront money and promised $300 million more in milestones for rights to OCA, a first-in-class agonist of the farnesoid X receptor, for liver ailments in China and Japan last year. Regulators consider the lead indication for OCA, primary biliary cirrhosis, to be an orphan disease.
Meantime, Intercept has an ongoing alliance with Servier, France's largest privately held drugmaker, for work on drugs against Type II diabetes. The deal gives Intercept exposure to the mega-blockbuster diabetes market, complimenting its focus on niche liver ailments.
Count OrbiMed Advisors among fortunate Intercept backers. As Bruce Booth, a partner at Atlas Venture, noted recently in his blog, OrbiMed has seen its investment in Intercept grow more than 70% based on the price of its bet on the biotech in a Series C round of venture capital in recent months. And OrbiMed stands to make a nice return on its investment if Intercept's share price holds up beyond the lock-up period for insiders.
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