Onconova ($ONTX) and Conatus ($CNAT) have kept the biotech IPO streak alive this week, crossing over onto the public market along with three other life sciences outfits. The deals indicate that investors remain hungry even after more than two dozen biotech companies have gone public this year.
Newtown, PA-based cancer drug developer Onconova Therapeutics priced its first public offering of nearly 5.17 million shares at $15 per share, above the $12 to $14 proposed range. And the value of the shares jumped in trading this morning, up about 44% to $21.62 as of 10:52 a.m. ET. Onconova hauled in $77.5 million in the deal, helping to fuel development of its PI-3 kinase contender rigosertib, for which Bayer has bought a license for development in Europe.
San Diego's Conatus Pharmaceuticals hit the midpoint of its proposed $10 to $12 range and boosted the size of the expected offering by 1 million shares, selling 6 million shares for $11 apiece to raise $66 million. Conatus sought the IPO to fund development of emricasan for liver disease. The former Idun Pharmaceutical executives behind Conatus initially sold Idun and emricasan to Pfizer ($PFE) in 2005 for $298 million. Pfizer sidelined the compound over safety red flags found in mouse experiments, but the Conatus team has revived development after reclaiming control of the program in a 2010 deal.
The two companies followed Agios Pharmaceuticals ($AGIO), Heat Biologics ($HTBX) and Cellular Dynamics ($ICEL) onto the public market this week. They have boosted the number of biotech IPOs in 2013 to 28, already way more than the 11 public debuts last year and a major comeback from the IPO slump that followed the 2008 financial meltdown.
Nobody expects the trend to continue indefinitely, but right now the IPO season appears to be wide open and rewarding private equity players who stayed invested in biotech as others backed off from bets on drug development because of the high risks and costs of the field. Yet public investors have taken some major gambles on largely unproven companies in many of the recent IPOs.
- here's Onconova's release
- see the Conatus release
Special Report: The biotech IPO scene turns red hot
Editor's note: This story has been corrected to reflect that Conatus is seeking their IPO to fund development of a drug targeting liver disease.