Last year Conkwest was just another small, largely unknown biotech with big plans in immuno-oncology. But after biotech billionaire Patrick Soon-Shiong bought in and took the CEO title, renaming the company NantKwest, it's now leaping onto the scene with a record-setting IPO that establishes a market cap baseline at a whopping $2.6 billion.
NantKwest ($NK) priced its IPO at $25 a share, far above the range, raising $207 million on the sale of 8.3 million shares. Its shares opened at $37 as eager investors rushed in, then dropped several dollars a share.
The market cap debut is even better than celebrity biotech Juno ($JUNO), which made a big splash with its own IPO in the middle of a three-year bull market for biotech stocks. And it tops Axovant ($AXON), a biotech that scored big after former hedge fund exec Vivek Ramaswamy picked up a failed Alzheimer's drug from GlaxoSmithKline ($GSK) and flipped it into a public company.
Soon-Shiong is perhaps best known for Abraxane, selling the drug and his company Abraxis to Celgene ($CELG) in a $2.9 billion sale. But today he's sitting on a new fortune that's a long way from any product approvals. And this latest entry onto Nasdaq is already stirring a fresh debate over whether the IPO scene has become a place for wildly overpriced stocks for high-risk companies that are big on potential and light on track record.
Aside from working with what the company calls a naturally superior cell killer, NantKwest believes that it can coordinate an NK (natural killer) cell as well as a T cell attack on cancer, using a PD-L1 antibody. And because their activated NK cells don't have to be extracted from the patient, Soon-Shiong could vault past the pioneers and into the leadership at a crossroads of hot new cancer drug technologies.
NantKwest, though, has a long way to go. The company had spent only $60 million on research when it filed to go public recently, a fraction of the money that the company has raised. Its current market cap rests almost entirely on Soon-Shiong's reputation and the market potential for new immunotherapeutics.
Institutional investors have been eager to join in. Soon-Shiong arranged a $71 million crossover round after NantKwest--closely allied to Sorrento--filed for its IPO. The money came from 9 unidentified investors. NantKwest has now raised almost 5 times as much money as it spent on research to get to where it is today.
Special Report: The 25 most influential people in biopharma in 2015 - Dr. Patrick Soon-Shiong - NantWorks