Jounce Therapeutics has raised $101.8 million for its initial public offering after pricing the IPO at $16 per share, according to a company news release. The price exceeded initial projections of $13 to $15 per share.
Reaffirming its new valuation, its shares hovered around $17 throughout its first day of trading, closing at $17.25.
The early stage biotech company, with a focus on cancer immunotherapy and targeted therapeutics, has raised $102 million in private funding to date, from investors such as Third Rock.
Jounce is listed on the NASDAQ Capital Market under the ticker symbol “JNCE”.
Jounce’s lead compound, JTX-2011, targets head and neck cancer and non-small cell lung cancer. It is developing the compound in partnership with Celgene. The therapeutic is valued as high as $2.3 billion. At the close of trading Friday, Jounce’s share price was $17.25.
The higher than expected pricing for Jounce’s IPO could bode well for other biotech companies considering taking on the gamble of going public. The sector’s IPO market has come a long way from the lows of 2015-2016.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
For comparison, a fellow immuno-oncology company Merus ($MRUS) listed on the NASDAQ in May 2016. Novartis, Johnson & Johnson and Pfizer were already on board and expected to buy up to half of the common shares offered by the Netherlands-based company. Despite this, investors exercised caution.
When Merus first announced its IPO it was looking to raise around $100 million. It soon recalibrated, setting its sights on a more modest sum of $55 million. When the company eventually floated on May 19, it collected just $47.3 million in net proceeds.
As of Friday, Merus shares were trading at $23.94.
Other biotechs didn’t even try. Bavarian Nordic and BioCardia both canceled their IPOs around the same time, citing poor market conditions.
As the market picks up, it looks like there may be a backlog of biopharma companies waiting to list.
On Thursday, Anaptysbio ($ANAB) went public, gauging market enthusiasm for an early stage biotech developing therapies for inflammatory conditions. It raised $75 million and landed in the middle of its price range at $15 per share. Anaptysbio shares were trading at $17.53 when markets closed on Friday.
On the same day, reproductive health company ObsEVa ($OBSV) raised $97 million. It booked in $15 per share, in the middle of its $14-$16 price range. But as the day progressed, its shares dropped as low as $10.71. They finished the week at $11.81.
There’s more to come. Vaccine company Visterra initially planned to go public on Jan 26. There has been an unexplained delay, but a $40-$50 million IPO is still on the cards. New Jersey’s Braeburn Pharmaceuticals is also eyeing a $150 million IPO in the coming weeks.
Photo: AUDINDesign, Getty Images
