Cortexyme, a US-based Alzheimer’s disease drug developer which counts internet and technology group Alphabet and pharmaceutical firms Pfizer and Takeda, floated yesterday in a $75m initial public offering.
The company issued 4.4 million shares on the Nasdaq Global Market priced at $17.00 each, in the middle of the IPO’s $16 to $18 range. Its shares popped to close at $32.89 on their first day of trading.
Cortexyme is developing therapeutics to treat degenerative diseases such as Alzheimer’s by focusing on a pathogenic bacterium known as porphyromonas gingivalis, which is found in the brains of patients suffering with the disease.
The company’s lead drug candidate, COR388, is being developed to target and inhibit gingipains, enzymes that are secreted by porphyromonas gingivalis. Proceeds from the offering will fund a phase 2/3 clinical trial for the small molecule candidate.
The IPO comes after Cortexyme received $76m in a June 2018 series B round featuring Alphabet’s Verily Life Sciences subsidiary as well as Pfizer and Takeda, the latter investing through its corporate venturing subsidiary, Takeda Ventures.
The series B round included Sequoia Capital, Vulcan Capital, Epiq Capital Group, RSL Investments, Smallcap World Fund, Huizenga Capital, the Lamond Family, Dolby Family Ventures and Breakout Ventures. Its closed in conjunction with the conversion of $8.8m in convertible notes issued earlier in the year.
Pfizer led the company’s $15m series A round in 2016, investing alongside Takeda Ventures and Dolby Family Ventures. It had raised $1m seed funding from Dolby Family Ventures and Breakout Labs in 2014.
Pfizer is the company’s largest shareholder, with a 12.2% stake diluted from 14.7%. Its other notable backers include Pierre and Christine Lamond (11% post-IPO), Takeda Ventures (10.2%) and Smallcap World Fund (6%).
Joint book-running managers BofA Merrill Lynch and Credit Suisse Securities and co-managers Canaccord Genuity and JMP Securities have the option to purchase about 660,000 additional shares which would boost the size of the offering to more than $86m.