Epizyme Soars 50 Percent in IPO Debut
It didn’t take much time for Epizyme to capture the hearts, minds, and cash of public investors Friday.
The Cambridge, MA-based biotech (NASDAQ: EPZM) saw overwhelming support from investors for its IPO, which priced at $15 per share Thursday night—the high end of the $13 to $15 range it set a week prior. The good vibes continued Friday, as Epizyme’s stock skyrocketed more than 50 percent and closed at $22.99 on its first day of trading. This all during a day in which the Nasdaq dropped 1 percent and the Nasdaq Biotechnology Index as a whole dipped 2 percent.
That means there are a lot of happy folks today at New Enterprise Associates, Kleiner Perkins Caufield & Byers, Bay City Capital, Celgene (NASDAQ: CELG), and MPM Capital, who were Epizyme’s five largest shareholders prior to the IPO, according to the company’s May 28 prospectus. Epizyme raised $76.3 million from its investors through three rounds of financing since its inception in 2007.
Epizyme sold 5.9 million shares at $15 apiece in its IPO, including the over-allotments given to underwriters Citi, Cowen & Co., Leerink Swann, JMP Securities, and Wedbush Securities. If all the over-allotments are exercised by the underwriters—almost a certainty since they can buy the shares at $15 and sell them for a quick profit—then Epizyme will haul in about $88.7 million to its company coffers. It began trading today with a market capitalization over $400 million.
Epizyme is creating targeted cancer therapies for small patient groups using epigenetics, a field of biology based on the idea of switching genes on and off without changing the underlying DNA. The company is making drugs that target a 96-member class of enzymes called histone methyltransferases, or HMTs. Its most advanced drug is EPZ-5676, which blocks an enzyme called DOT1L. Epizyme began an early-stage study of the drug in September in patients with mixed lineage leukemia, a genetically-defined subtype of common blood cancers such as acute myeloid leukemia.