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BridgeBio Upsizes IPO to $348M, Topping Adaptive’s Wall Street Debut

Xconomy San Francisco — 

Rare disease drug developer BridgeBio is now a public company, raising $348.5 million in the biggest biotech IPO so far this year.

On Wednesday night, BridgeBio priced its stock offering of 20.5 million shares at $17 each, topping the $14 to $16 per share price range it had initially targeted. The Palo Alto, CA, company was able to raise more money than it planned. Last week, its preliminary IPO terms penciled in a stock offering of 15 million shares, which would have raised $225 million at the midpoint of the price range.

The BridgeBio IPO beats the $300 million raised by Seattle-based Adaptive Biotechnologies Wednesday. BridgeBio’s shares are expected to start trading on the Nasdaq exchange Thursday under the stock symbol “BBIO.”

BridgeBio stands as an example that there’s more than one way to build a biotech company. One common approach involves assembling scientists and investors behind a single compound. In contrast, BridgeBio has multiple programs, each operating as semi-autonomous subsidiaries that share resources with the parent company and each other. BridgeBio says its approach offers advantages and efficiencies compared to other biotech business models and it has a pipeline of 16 programs—two in Phase 3 testing—to show for it.

Founded in 2015, BridgeBio focuses on developing drugs for rare diseases that stem from defects in a single gene, as well as cancers that have clear genetic drivers. The company’s model involves finding overlooked research at universities or on the shelves of pharmaceutical companies. BridgeBio acquires rights to these compounds and builds companies around them.

If BridgeBio’s approach sounds familiar, it’s similar to the one taken by Roivant Sciences. But BridgeBio goes further by having its companies share work space and some staff, such as accounting and human resources, the company says in its prospectus. BridgeBio subsidiaries are lean, staffed by a “minimum viable team” of fewer than five for early-stage candidates. That team can grow as the research approaches clinical trials.

“Once a program is in the clinic, we will size and structure a team commensurate with need, subject to our minimum viable team approach,” BridgeBio says in its IPO filing.

BridgeBio’s business model has yet to yield an FDA-approved drug. But the company’s approach is intended to reduce redundancies and make it easier to quickly stop work when a program falters. As BridgeBio’s subsidiaries progress, they can strike out on their own or strike deals with other companies. PellePharm, a subsidiary built around patidegib, an experimental treatment for a rare skin cancer, reached a deal last year with Denmark-based LEO Pharma to finance Phase 3 testing.

Eidos Therapeutics (NASDAQ: EIDX) went public a year ago to fund late-stage testing of AG10, an experimental treatment for transthyretin amyloidosis, a rare disease that leads to the buildup of amyloid protein in organs and tissues. As of the end of 2018, BridgeBio owned a 62.5 percent stake in Eidos, according to securities filings.

BridgeBio’s filings show that it spent $140 million on research and development in 2018, a 540 percent increase over the prior year. In the first quarter, R&D expenses totaled $44.8 million, a 32.5 percent year over year increase. The BridgeBio pipeline includes a mid-stage compound acquired from Novartis (NYSE: NVS) last year that subsidiary QED Therapeutics is now developing as a treatment for bile duct cancer and a rare bone disease. BridgeBio says it will use the IPO proceeds to advance the clinical development of that program and others, and also acquire new drugs.

BridgeBio had raised more than $482 million in financing, including a $299.2 million round announced at the start of the year. Private equity firm KKR is BridgeBio’s largest shareholder, with a 34.3 percent stake prior to the IPO, according to the filing. Viking Global Investors held a 22.1 percent pre-IPO stake.

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