Zentalis Pharmaceuticals, a US-based small molecule therapeutics developer backed by research services provider Pharmaron, went public on Friday in a $165m initial public offering on the Nasdaq Global Market.
The company increased the number of shares in the offering from 7.65 million to 9.18 million and priced them at the top of the IPO’s $16 to $18 range. Its shares closed at $23.20 on their first day of trading and have risen to $25.20 at time of publication.
Founded in 2014, Zentalis is working on small molecule drugs designed to treat cancer by targeting fundamental biological pathways. It will use $60m of the IPO proceeds to advance its lead candidate, ZN-c5, which is in phase 1/2 clinical trials for metastatic breast cancer.
A further $25m will support clinical development of ZN-c3, which is in a phase 1/2 trial for solid tumours, while $15m will go to completing a phase1 trial for a haematological malignancy candidate known as ZN-d5.
Zentalis said in the IPO prospectus it had raised $162m prior to the flotation. It completed an $85m series C round featuring Matrix Capital, Viking Global Investors, Redmile Group, Farallon Capital, Perceptive Advisors, Eventide Asset Management and Surveyor Capital in December 2019.
The company has disclosed that its earlier investors included Pharmaron as well as Alexandria Venture Investments, the venture capital arm of life sciences real estate investment trust Alexandria Real Estate Equities, and Highlight Capital.
The only investors to hold stakes sized at 5% or higher pre-IPO were Matrix Capital, the owner of a 15.1% stake diluted to 11.1%, and Viking Global, whose 14.7% share was cut to 10.8%.
Joint book-running managers Morgan Stanley, Jefferies, SVB Leerink and Guggenheim Securities have 30 days to acquire approximately 1.38 million additional shares which would boost the size of the offering to $190m.
