Spruce Biosciences, a US-based developer of treatments for endocrine disorders, has floated in a $90m initial public offering representing an exit for pharmaceutical firm Novo.
The company increased the number of shares in the offering from 5 million to 6 million and priced them at $15.00 each, in the middle of the $14 to $16 range it set last week, valuing it at $334m. It listed on the Nasdaq Global Select Market and closed trading at $17.00 on Friday.
Founded in 2016, Spruce is working on a non-steroidal therapy for classic congenital adrenal hyperplasia (CAH), a life-threatening genetic disease that affects steroid hormone production in the adrenal glands.
The company will channel $40m of the proceeds into research and development activities for rare endocrine disorders such as classic CAH in children, and $20m will go to the new drug application and commercial preparation process for its lead drug candidate, tildacerfont.
An additional $5m of the IPO takings will support two phase 2b clinical trials for tildacerfont currently underway in adult patients with classic CAH.
Novo and venture capital firm RiverVest Venture Partners provided $20m in series A funding for Spruce in 2017 before buying another $8m of series A shares two years later, according to the IPO prospectus.
Spruce received $88m in a February 2020 series B round co-led by Omega Funds and Abingworth and backed by Novo, RiverVest, HealthCap Partners, Rock Springs Capital, Surveyor Capital, Aisling Capital, Sands Capital and Citadel, before the same investors doubled the round in August, the prospectus states.
The company’s largest investors are Novo, owner of a stake that was diluted from 29.1% to 21.3% in the offering, followed by Omega Fund (8.6% post-IPO), RiverVest (8.5%), HealthCap (8%), Abingworth (7.2%), Rock Springs (4.6%), Aisling Capital and Citadel (4.3% each).
Joint book-runners Cowen, SVB Leerink, Credit Suisse and RBC Capital Markets have the 30-day option to buy an extra 900,000 shares, which would lift the size of the offering to more than $103m.
