Biotech’s recent slump has crept into the IPO window. On one hand, the latest two biotechs to hold IPOs—Edge Therapeutics and Mirna Therapeutics—were able to close deals and prep for their debuts on the Nasdaq this morning. On the other hand, both biotechs had to scale back their offerings to get out.
Edge, of Berkeley Heights, NJ, sold 7,315,151 shares at $11 apiece. That’s an $80 million haul, close to the $85 million Edge was hoping to raise, but on far different terms. Edge had projected it’d sell 5.7 million shares at $14 to $16 apiece just ten days ago.
It was a similar story for Austin, TX-based Mirna, which raised $44 million by selling 6,250,000 shares at $7 apiece. Mirna previously aimed much higher—it wanted to sell 5 million shares at $13 to $15 apiece and take in at least $65 million.
Edge will begin trading this morning under the ticker symbol “EDGE,” and Mirna under the symbol “MIRN.”
Both IPOs are indicative of what’s been a short-term swoon for biotech. The Nasdaq Biotechnology Index (NASDAQ: IBB) posted eight straight losing days after drug pricing took center stage in Washington, fallout from the Turing Pharmaceuticals fiasco. The index posted its first post-Turing gains on Wednesday, but Edge and Mirna are the first two companies to price IPOs since the bio losing streak began on Sept. 18. Is it a blip or greater cause for concern among IPO candidates? We’ll know more as newer candidates like South San Francisco-based MyoKardia start setting terms for their own offerings, or more of the startups to recently grab cash from crossover investors settle into the IPO queue.
Edge is using the IPO cash to push forward a drug it’s been developing to combat potentially delayed effects of aneurysms and severe head injuries. The drug, called EG-1962, is an injectable, sustained-release form of the pill nimodipine, which was approved to treat cerebral vasospasm—a potentially deadly narrowing of the arteries of the brain following an aneurysm—more than two decades ago. Edge plans to start a Phase 3 trial of EG-1962 in mid-2016.
Mirna, meanwhile, is developing microRNA drugs for cancer. Its first drug, called MRX34, is in Phase 1 testing. Mirna intends to expand the study by adding 100 more patients with a variety of cancers—like liver cancer, melanoma, small cell and non-small cell lung cancer, and lymphoma—and produce data next year.
Edge’s top shareholders before the IPO were Sofinnova Ventures (9.2 percent), Venrock (8 percent), Janus Global Life Sciences Fund (8 percent), New Leaf Venture Partners (6.4 percent), and Franklin Advisers (6.4 percent).
With a 17.8 percent stake, Sofinnova also held the most sizeable stake in Mirna before the IPO. It holds just one more share than New Enterprise Associates (also good for a 17.8 percent stake), filings show. Some of Mirna’s other backers include Pfizer (15 percent), The Texas Treasury Safekeeping Trust (7.1 percent), Eastern Capital (6.4 percent), and Baxalta (5.3 percent).