Three biotechs raise $700M in rare burst of IPO activity
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Three drug startups collectively raised more than $700 million in initial public offerings Thursday, a flurry of activity after a largely fallow summer in which few biotechnology companies made the jump to public markets.
Cancer biotech Bicara Therapeutics secured $315 million in the third-largest IPO of the year, according to BioPharma Dive data. Autoimmune drug developer Zenas BioPharma followed with a $225 million stock sale, while MBX Biosciences, which is studying endocrine and metabolic conditions including obesity, raised $163 million.
All three met projections they set the past few weeks. Bicara hiked its offering size by 25% before pricing and still sold more shares than anticipated. Zenas and MBX upsized their IPOs as well.
The trio of offerings is a notable occurrence this year. So far, 18 biotechs have now priced IPOs in 2024, in line with each of the prior two years but well below pre-pandemic totals. More than half currently trade below their offering price, BioPharma Dive data show.
As in the past two years, lengthy dry spells have followed bursts of IPO activity. Prior to Thursday, the last time three biotechs went public in the same week was in early February, when cell therapy developer Kyverna Therapeutics, gene editing company Metagenomi and anti-aging startup Telomir Pharmaceuticals raised about $420 million over two days.
By and large, the companies making it to an IPO have been later-stage, with drugs already in human testing. But even for those firms, the market remains challenging and, in recent months, there have been more buyout deals for private biotechs than IPOs. The pattern suggests young drugmakers and their backers are opting to sell, while pharmaceutical companies are finding bargains in mature startups that aren’t yet public.
Even with the spike in private acquisitions, there is a backlog of startups that are relying on later funding rounds to stay afloat and wait for the right opportunity. Their arrival onto the market may be delayed by U.S. elections in November and uncertainty around interest rates, however.
“We don’t anticipate a rapid recovery until the dust settles on macro uncertainties, but expect to see an uptick in companies going public in early '25,” wrote Jefferies analyst Michael Yee in an investor note this summer.
The IPOs Thursday may offer a glimpse of what’s to come. All three secured hundreds of millions of dollars in venture investment prior to testing Wall Street, and each has drug prospects in Phase 1 testing or later.
Bicara is advancing a bifunctional antibody drug for a type of head and neck cancer. Later this year or early next, it expects to begin a late-stage trial evaluating the drug alongside Merck & Co.’s Keytruda in people newly diagnosed with the disease. Bicara plans to test the drug in other solid tumors, too.
Meanwhile, Zenas is riding a wave of interest in immunology drugs. A dual-targeting antibody it’s been developing is in Phase 3 testing for an inflammatory condition called IgG4-disease and a Phase 2 study for a type of anemia. The company may also soon start mid-stage trials in multiple sclerosis and lupus. Its IPO is the fifth for an immune drug developer this year, the most since 2021, BioPharma Dive data show.
MBX Biosciences specializes in metabolic disease, another area of research that’s attracted increasing investment. Its lead drug is in a Phase 2 study for hypoparathyroidism. The company also has a treatment in earlier testing for complications of bariatric surgery, as well as a preclinical obesity drug.
Kairos Pharma, a developer of small molecule cancer drugs, was also scheduled to price a smaller, $6 million offering Thursday.