Agios Pharmaceuticals has begun an anticipated busy week of biotech IPOs, pricing more than 5.8 million shares at $18 apiece, overshooting the previous range of $14 to $16. The young cancer drug developer ($AGIO) plans to start trading its common stock on the Nasdaq today, kicking off the first of several scheduled public debuts this week.
The company's stock hit Nasdaq this morning with a bang, soared nearly 60% to $28.67 per share as of 12:25 p.m. ET.
Cambridge, MA-based Agios has sailed to an oversized IPO of nearly $106 million amid a roaring comeback for such deals in 2013, during which about two dozen biotech companies have gone public. Agios has been one of the IPO deals to watch because the company has already raised more than $250 million from venture backers and its marquee partner Celgene ($CELG), which tied up with the biotech startup early to tap its science in the hot field of cancer metabolism.
Agios, a 2009 Fierce 15 company, has become the latest biotech outfit to jump through the IPO window without a single drug in clinical trials, an indication of how willing public investors are to bet on the companies before they have human data on their drugs. If anyone is searching for signs of waning interest in biotech IPOs, they won't find it in the numbers from Agios's offering. And industry watchers have been cautiously tracking the IPO scene this year for any indication of the streak letting up, after public debuts in biotech became a rarity in the aftermath of the 2008 financial collapse.
In fact, the lack of IPO activity prior to this year had been cited in arguments against risky gambles on biotech startups such as Agios. However, those that stayed the course have been rewarded, including Agios backers Third Rock Ventures, Arch Venture Partners and Flagship Ventures.
Still, public investors have swallowed a lot of risk in buying into unproven biotech outfits, which have raised more than $1.5 billion this year in IPO deals. Owners of Agios should keep an eye on its emerging pipeline, which features a lead candidate called AG-221 that is expected to begin human testing this year for cancer patients with IDH2 mutations.
Special Reports: The biotech IPO scene turns red hot | Agios Pharmaceuticals - 2009 Fierce 15