Gossamer Bio, the San Diego-based biotech founded by former Receptos executives, has raised $276 million in its initial public offering, a total that puts it in a rare class among biotechs that have gone public in recent years.
The amount raised surpassed expectations. During the partial federal government shutdown in January, Gossamer announced it would pursue a little-used path to the public markets that required it to fix a share price, which was locked in for 20 days. But shortly thereafter the government reopened, and Gossamer announced it would reroute to the traditional path to the public markets on the terms it had set for the fixed-price path—about 14.4 million shares at $16 apiece.
The company stuck with that price but found enough investor interest to upsize its offering to about 17.3 million shares. Those shares are expected to begin trading on the Nasdaq exchange Friday under the stock symbol “GOSS.” The Gossamer IPO comes just over one week after the company asked the SEC to accelerate the review of its paperwork to allow it to go public before the date its stock offering would have automatically become effective under the fixed-price path. (It’s possible the prospect of another federal government shutdown on Feb. 15 added to its urgency.)
Gossamer’s IPO followed that of South San Francisco-based Alector (NASDAQ: ALEC), which priced Wednesday at $19 per share, raising nearly $176 million to test antibody drugs for Alzheimer’s disease and other brain disorders.
Both biotechs went public at valuations of at least a billion dollars. Last year, according to IPO research firm Renaissance Capital, only five of the 58 biotechs that went public were “unicorns”—a term used to describe companies valued at $1 billion or more.
The U.S. IPO market got off to a slow start this year thanks to the weeks-long closure of the federal government, which put the SEC out of commission. Ten companies have gotten out of the gate so far.
Gossamer, which started in 2015 following Receptos’s acquisition by Summit, NJ-based Celgene (NASDAQ: CELG) for about $7.2 billion, emerged about a year ago with $100 million in financing. Later in 2018 it raised $230 million more. Headed by CEO Sheila Gujrathi, formerly chief medical officer at Receptos, Gossamer increased its headcount over the year to more than 100 employees.
Now the company says it will use the IPO cash to advance its investigational drugs, including its lead drug candidate, GB001, which is in a Phase 2b clinical trial as a treatment for a hard-to-manage form of asthma; and experimental treatments for pulmonary arterial hypertension, which is a rare, progressive disorder characterized by high blood pressure in the arteries of the lungs, and ulcerative colitis, a form of inflammatory bowel disease, both of which the company says will be funded through planned Phase 1b testing.