Rapt Therapeutics, a US-based cancer and atopic dermatitis therapy developer backed by internet technology conglomerate Alphabet and pharmaceutical firm Celgene, raised $36m yesterday in a scaled back initial public offering.
The IPO consisted of 3 million shares issued on the Nasdaq Global Market at a price of $12.00 each, at the bottom of the IPO’s $12 to $14 range. It initially filed for an $86.3m offering in July this year and re-filed last week with a $75m target.
Founded in 2015 as FLX Bio, Rapt is developing small molecule drugs to treat oncology and inflammatory diseases. It intends to put $10m to $15m of the IPO proceeds into the progress of FLX475, a cancer drug candidate in phase 1/2 clinical trials.
Roughly the same amount will go to pushing a second candidate, RPT193, through phase 1 trials for a skin condition known as atopic dermatitis. Rapt also plans to advance a solid tumour candidate called RPT-GCN2i towards clinical testing.
The company had raised $176m in funding, including $97m in a June 2019 series C round featuring Alphabet’s GV unit, Celgene, The Column Group (TCG), Topspin Partners, Kleiner Perkins and T. Rowe Price.
Rapt had already disclosed $50m in series B funding from Celgene, TCG, Topspin Partners and Kleiner Perkins predecessor Kleiner Perkins Caufield & Byers (KPCB) in 2016 alongside a previously unrevealed $29m series A round.
Existing shareholders bought $15.7m of the shares in the offering but it is unclear whether either corporate purchased stock as neither had a pre-IPO stake of 5% or more. TCG invested $7.5m in the IPO and will remain Rapt’s largest shareholder, its stake falling from 33.4% to 31.7%.
Topspin Fund bought about $5m of shares and its stake will increase from 11.7% to 12%, while Regents of the University of California spent $2.8m to keep its stake at 7.3%. KPCB’s share of the company was diluted from 19.3% to 16.6% post-IPO.
Joint book-running managers BMO Capital Markets, Wells Fargo Securities and UBS Investment Bank have the 30-day option to acquire a further 450,000 shares which would boost the size of the offering to $41.4m. Rapt’s shares closed at $13.00 on their first day of trading yesterday.
