US-based small molecule drug developer Monte Rosa Therapeutics went public yesterday in a $222m initial public offering representing an exit for internet and technology group Alphabet’s GV unit.
The company increased the number of shares in the offering from 9.7 million to 11.7 million and priced them at the top of the IPO’s $17 to $19 range. They rose to $21.18 on their first day of trading on the Nasdaq Global Select Market, giving it a market capitalisation of $900m.
Monte Rosa is working on slam molecule therapeutics and will put $47m to $57m of the IPO proceeds and its cash on hand into a phase 1/2 clinical trial for a prospective lung cancer drug called GSPT1.
Up to $130m will fund the development of additional drug candidates, from a pipeline that includes candidates for ovarian and breast cancer, inflammatory diseases and autoimmune disease. Monte Rosa has allocated $57m to $67m to work on its protein degradation platform.
Venture capital firms Versant Ventures and New Enterprise Associates (NEA) supplied $32m in series A funding for the company in May 2020 and returned for a $96m series B round four months later that included GV.
The September round was led by healthcare investment firm Aisling Capital and also featured HBM Healthcare Investments, Cormorant Asset Management, Amzak Health, Casdin Capital, Sixty Degree Capital and Cambridge Asset Management.
Avoro Capital Advisors led Monte Rosa’s $95m series C round in March this year, investing alongside all the series A backers as well as Avoro Capital Advisors, which led the round, investment and financial services group Fidelity, RTW Investments, funds and accounts managed by BlackRock and funds and accounts advised by T Rowe Price.
GV’s stake in the company remains below 5%. Its largest shareholders are Versant Ventures (20.5% post-IPO), NEA (15.6%), Cormorant Asset Management (6.1%), Fidelity and Avoro (4.5% each) and HBM Healthcare Investments (4.1%).
Joint book-running managers JP Morgan Securities, Cowen, Piper Sandler and Guggenheim Securities have a 30-day option to acquire just over 1.75 million additional shares, which could boost it to over $255m.
