Applied Therapeutics, a US-based molecular drug developer backed by life sciences real estate trust Alexandria Real Estate Equities, has gone public, issuing 4 million shares priced at $10 each.
The $40m in proceeds are less than half of the $86.3m the company had initially targeted when it filed for an initial public offering last month. It floated on the Nasdaq Global Market last week and its shares closed at $8.53 on Friday.
Founded in 2016, Applied Therapeutics is developing treatments for a range of fatal or debilitating diseases, such as diabetic cardiomyopathy, a disorder that affects people with diabetes and which can lead to heart failure with an accumulation of fluid in the lungs or legs.
The company will use approximately $30m of the proceeds to fund a phase 2/3 clinical trial for AT-001, a drug candidate targeting diabetic cardiomyopathy. Another $5m will go to advancing AT-007, a therapy for rare genetic metabolic disorder galactosemia, into a phase 1 trial.
Applied will also use $4m to move its treatment for diabetic eye disease, AT-003, into a phase 1 trial, and the remainder will fund research and development efforts.
The company had secured some $38m in equity and debt financing ahead of the offering. Alexandria Venture Investments, the corporate venture capital division of Alexandria Real Estate Equities, led its $7m series A round in 2017 with a $1.8m investment, according to the IPO prospectus.
E Squared Capital Management, ETP Global Fund, Syno Capital and private investor Franklin Berger also backed the series A round. Applied subsequently completed a $25.1m series B round in February 2019, converting $6m of debt financing secured in February 2018 into equity.
Alexandria’s 18.5% stake has been diluted to 14.2% in the IPO, while E Squared now owns 4.1%, down from 5.3%. Shoshana Shendelman, chief executive and chairman of Applied Therapeutics, remains its largest shareholder, with a 29.5% stake.
Citigroup, Cowen and Company, UBS Securities and Robert W Baird are the underwriters for the offering. They have been granted a 30-day option to purchase up to an additional 600,000 shares which would lift the size of the IPO to $46m.
