Three biotech companies collectively raised $584 million in their initial public offerings last week, continuing a streak that has the healthcare sector playing a leading role in the robust level of market activity this summer.
Of the three companies, the one with investigational therapies that haven’t yet begun tests in humans raised the most. South San Francisco-based Nkarta (NASDAQ: NKTX) collected $252 million, money the preclinical firm plans to use to get its lead allogenic, or “off-the-shelf,” cancer therapy into the clinic by year’s end and to advance its earlier programs. The oncology company offered 14 million shares at $18 per share, pricing above its anticipated range of $16 to $17 per share.
Nkarta’s oncology therapies—it has three programs behind the one expected to start human tests this year—use natural killer (NK) cells from healthy donors that have been modified in a lab to better fight the cancer. The method is like that used to create chimeric antigen receptor T cell therapies, or CAR-Ts, but the company says it has the potential to reduce the possibility of dangerous immune reactions, which can occur when a patient receives someone else’s modified T cells.
Shares of Nkarta jumped 166 percent on Friday, the company’s first day of trading, in what IPO research firm Renaissance Capital said was the highest day-one pop for an IPO of more than $10 million since 2015.
San Diego oncology biotech Poseida Therapeutics (NASDAQ: PSTX), which has two programs under evaluation in human tests, also started trading Friday. The company at the start of last year previously revealed its intention to go public, setting a preliminary target of $115 million. A few months later, however, it withdrew the filing, instead taking a $142 million round of private financing. This year it raised another $110 million.
In its IPO, Poseida raised $224 million, offering 14 million shares at $16 apiece, an increase in deal size from its earlier proposal of 10 million shares at $14 to $16 per share.
Poseida’s lead candidate is an autologous CAR-T therapy, a type of treatment made by taking a patient’s own T cells and multiplying them in a lab before reinfusing them. The product candidate is being studied in a Phase 2 study for patients with multiple myeloma; the clinical trial has the potential to provide enough data for the FDA to consider it for approval. Poseida’s second clinical-stage candidate is also autologous, and is being studied in patients with prostate cancer that has spread. Behind these programs, the company has a half-dozen allogeneic CAR-T therapies in preclinical development.
Shares in the company fell 4 percent on Friday, its first day of trading.
Joining the US biotechs was Inventiva (NASDAQ: IVA), a French firm developing therapies for nonalcoholic steatohepatitis (NASH) and other diseases. The company offered about 7.5 million shares at $14.40 per share, the midpoint of its range, raising $108 million.
Inventiva has two drug candidates in the clinic. Its lead, lanifibranor, is being evaluated as a potential treatment for patients with NASH. This year has been heralded as the one in which the first treatment for the fatty liver disorder is likely to be approved, but in recent months some among the front-runners have stumbled, including French company Genfit (NASDAQ: GNFT) and New York’s Intercept Pharmaceuticals (NASDAQ: ICPT). The company is also studying an investigational drug called odiparcil as a potential treatment for patients with mucopolysaccharidoses, a group of rare genetic disorders.
Shares in Inventiva ended Friday down 7 percent.
Going public alongside these biotechs was a “blank-check” company—also known as a special-purpose acquisition company, or SPAC—created and headed by executives from investment firm RA Capital. Therapeutics Acquisition (NASDAQ: TXAC) raised $118 million funds it intends to deploy to buy up biotechs.
In mid-May the Wall Street Journal reported that SPACs were on track to have their biggest year ever with $6.5 billion raised. On its first day of trading the Therapeutics shares popped 20 percent, a first-day record for a SPAC, according to Renaissance.
The fervor for public investments in biotech, even setting aside those pursuing vaccines and drugs related to the novel coronavirus, shows little sign of cooling. This week, Relay Therapeutics, which aims to raise $250 million to advance its investigational treatments for solid tumors, is expected to make its debut, as are Pandion Therapeutics and ALX Oncology, according to Renaissance.