The biopharma IPO industry continues to heat up.
In the last few weeks, a company has set terms for a forthcoming initial public offering. A second company has filed preliminary plans. Another biopharma company that is still in its infancy has seen its stock rise since it went public a little over two weeks ago.
The fact that the stock market has risen by double-digits is a big help. The biopharma sector, however, has not done as well. The Nasdaq Biotechnology index has risen just 3 percent and the SPDR S&P Biotech ETF has risen 2.8 percent. Institutional Investor reported recently that a number hedge funds specializing on biopharma and life science stocks are in the negative through the first five month of 2024.
Actuate Therapeutics is still working on developing therapies for cancers with high impact and difficult to treat. Last week, the company set terms for a planned IPO. The biopharmaceuticals firm will offer 5.6 million common shares for between $8 and 10 per share. The company would raise approximately $50 million at the midpoint.
Currently, two venture-capital firms hold a majority of shares: Bios Partners, with 55 percent ownership, and Kairos Ventures, with 17 percent.
Alumis, an early-stage biopharmaceutical company that develops oral therapies for patients with immune-mediated disease, has filed its initial plans to go public. Three investment firms, including a hedge fund, are listed as each owning at least 5 percent of shares. However, their exact stakes aren’t included. These include entities affiliated with the hedge fund firm Baker Brothers Life Sciences.
Alumis announced its latest private fundraise just three months ago. The $259 million Series C financing was led by Foresite Capital, a new investor Samsara BioCapital, and venBio partners. The fundraise attracted a number of new investors including Cormorant Asset Management, a life sciences hedge fund.
Actuate and Alumis will likely be optimistic about the IPO given the success of Rapport Therapeutics’ recent offering. Rapport priced shares at $17 each on June 6, the midpoint of the planned range of $16 to $18. Since the shares started trading, they’ve risen by about 43 percent. The clinical-stage biopharmaceuticals firm is developing small-molecule drugs for patients suffering from central neurological system disorders.
According to a regulatory filing, entities affiliated with Cormorant held 6.62 percent of shares before the IPO. According to a press announcement at the time, Cormorant led $150 million Series B financing round in August 2023. Rapport announced that Raymond Kelleher had been appointed to Cormorant’s board of directors. He has been the managing director since July 2020. Rapport stated in its IPO filing that Kelleher intended to resign immediately from the board, before the registration statement took effect. The company said that the resignation “was not due to any disagreements with us or any issues relating to our policies, operations, or practices.”
Alumis was also backed by other hedge funds. Perceptive Advisors (a Citadel Company), Surveyor Capital, and Logos Capital all participated in the Series-B financing. The regulatory filing for the IPO did not list any of the three as a 5 per cent owner.