Three life sciences companies went public late Wednesday and raised more than $300 million combined. They were headlined by Deciphera Pharmaceuticals, which pulled in $127.5 million in an upsized IPO.
The Waltham, MA-based cancer drug developer priced its shares at $17 apiece, which was on the high end of the $15 to $17 range it set. Deciphera also sold 7.5 million shares in its IPO, 1.25 million more shares than it had intended. The company’s stock now trades on the Nasdaq exchange under the symbol “DCPH.” On the company’s first day of trading, its shares closed at $17.65, up 3.8 percent.
Deciphera develops drugs that block kinases, enzymes that play a key role in the growth and spread of cancers. Its lead drug, called DCC-2618, blocks a full range of kinases that drive gastrointestinal stromal tumors, or GIST. The compound is in a Phase 1 clinical trial.
Kinase inhibitors have established themselves in the arsenal of cancer treatments. Since the 2001 approval of imatinib (Gleevec),the first kinase inhibitor, 33 more such drugs have received an FDA nod. Despite the success of these drugs, cancers can become resistant to them and side effects can limit the dose given to a patient. Furthermore, the approved kinase inhibitors target fewer than 10 percent of the more than 500 known human kinases. Deciphera aims to develop better kinase-targeting drugs using a proprietary technology that it says can essentially turn kinases off as if turning off a light switch.
Deciphera had $94 million in cash at the end of June, and spent $20.1 million on R&D last year, according to its filing. It plans to use the IPO cash to fund clinical trials—mostly testing of DCC-2618. In addition to the Phase 1 study, Deciphera also plans a Phase 3 trial testing DCC-2618 against Pfizer’s (NYSE: PFE) sunitinib (Sutent) in GIST patients who have failed one treatment. The company expects to start that trial in the second half of next year. Following the IPO, Deciphera expects to have enough cash to last through the first half of 2019.
Prior to Thursday’s stock offering, Deciphera had raised $227.6 million in private financings, the most recent being a $75 million Series C round in 2015. The company’s largest investors include BrightStar Associates, affiliates of New Leaf Venture Partners, SV Life Sciences Fund, and affiliates of Viking Global Investors. BrightStar held the largest investment stake in Deciphera and following the IPO, it will continue to own 54 percent of the company’s shares, according to filings.
Though life science companies have largely had success going public in 2017, many of them have done so with the help of insiders, earlier investors in the company who agree to buy additional shares in the IPO. Many of the biotech companies that went public in 2016 did so with the help of insiders as well, according to a Renaissance Capital report.
Deciphera insiders, for example, indicated an interest in buying up to $30 million worth of the company’s stock if the IPO price hit $16 per share, according to the filing.
Meanwhile, other life science companies climbed through the still open IPO window on Wednesday night. Nightstar Therapeutics (NASDAQ: NITE), a London-based gene therapy developer that has U.S. operations in Lexington, MA, raised $75 million in its IPO. And U.K. based NuCana, which is developing second-generation chemotherapies, raised $100 million in its own offering.