The financial markets may remain volatile but Keros Therapeutics (NASDAQ: KROS) managed to raise more money in its public market debut than it had initially planned.
Late Tuesday, the Lexington, MA-based company offered 6 million shares for $16 apiece, the high end of its projected price range. Keros had previously planned to offer 5 million shares in the range of $14 to $16 each. Those shares are set to begin trading on the Nasdaq exchange on Wednesday under the stock symbol “KROS.”
The IPO provides Keros with $96 million to advance the development of its investigational drugs for patients with blood and musculoskeletal disorders. The drugs that Keros is developing target a family of proteins called TGF-beta, signaling pathways that regulate red blood cell and platelet production, and growth, repair, and maintenance of muscle and bone.
The company plans to use the IPO proceeds to advance its clinical-stage drug candidates into mid-stage trials. The funds will allow it to start two Phase 2 trials of KER-050, in patients with myelodysplastic syndrome and in patients with myelofibrosis. The funds will also support KER-047 through an ongoing Phase 1 clinical trial and into two Phase 2 clinical trials, one in patients with anemia resulting from high hepcidin levels, and one in patients with fibrodysplasia ossificans progressiva, a rare disease in which skeletal muscle and connective tissue are gradually replaced by bone.
Some of the IPO cash is also slated to move another Keros drug candidate into the clinic.
Last month the company raised a needed venture capital round of about $56 million. As of Feb. 21 the company reported it had $3.6 million in cash and equivalents, money that it said would carry it through the second quarter of this year.
In adding to its coffers by joining the public markets, Keros joins another biotech that completed an IPO this month: Zentalis Pharmaceuticals (NASDAQ: ZNTL), which raised $165 million to advance its small molecule therapies for various cancers by offering 9.18 million shares at $18 apiece, the top end of its range.
Coronavirus has upended an optimistic IPO market, nearly shuttering the window through which many private companies planned to pass this year. Healthcare IPOs have bee been a bright spot so far. In the first quarter 25 IPOs raised $6.8 billion—more than in the first quarter of 2019, when 18 companies raised $4.7 billion, but below expectations, according to research firm Renaissance Capital. Healthcare companies accounted for half of all the IPOs during the quarter.
As many as 20 companies, however, put plans for offerings on hold during the quarter, the firm said. In the coming months the firm anticipates that only a handful more biotechs and “quarantine-friendly IPOs” are likely to join the public markets.