Avidity Biosciences, a US-based muscle disease drug developer backed by pharmaceutical firms Eli Lilly, EMS, ST Pharm and Takeda, floated on the Nasdaq Global Market on Friday in a $259m initial public offering.
The offering came after a considerable hike in its size, Avidity having increased the number of shares from 10 million to 14.4 million before pricing them at $18.00 each, above the IPO’s $14 to $16 range. Its shares opened at $26.50 on Friday and closed at $28.50, valuing it at just over $1bn.
Founded in 2013, Avidity is developing therapeutics that utilise oligonucleotides – short strands of DNA or RNA molecules – while incorporating the tissue selectivity of monoclonal antibodies.
Although the company is targeting a range of diseases, its initial drug candidates are focused on muscle atrophy. It will put $65m of the IPO proceeds into a phase 1/2 clinical trial for its lead candidate, a myotonic dystrophy treatment dubbed AOC 1001.
A further $35m will fund the initial clinical development of a therapy for duchenne muscular dystrophy while $25m will go to doing the same for muscle atrophy. The offering comes after $125m in venture funding.
EMS subsidiary Brace Pharmaceuticals joined F-Prime Capital, a subsidiary of financial services and investment group Fidelity then known as Fidelity Biosciences, as well as Partner Fund Management (PFM), Alethea Capital Management and TPG Biotech to provide $9.1m in series A funding for Avidity in 2014.
Takeda led the $10m equity portion of the company’s $16m series B round in 2017 through its Takeda Ventures unit, a round also featuring EMS’s Brace Pharma Capital fund, real estate investment trust Alexandria Real Estate Equities (AREE), F-Prime, Alethea Capital, EcoR1 Capital, Moore Venture Partners and Tavistock Life Sciences.
Brace Pharma Capital and Takeda Ventures joined Eli Lilly and ST Pharm in Avidity’s $100m series C round in November 2019 which included AREE unit Alexandria Venture Investments, RTW Investments, Tavistock Group, EcoR1, Cormorant Asset Management, CureDuchenne, Logos Capital and Perceptive Advisors.
Eli Lilly’s 10.4% stake was diluted to 6.1% in the offering, and Avidity’s other notable shareholders include RTW Investments (8.6% post-IPO), Cormorant (6.3%), Alethea Capital (4.9%) and EcoR1 (3.7%).
Joint book-running managers Cowen, SVB Leerink, Credit Suisse and Wells Fargo Securities have the 30-day option to buy up to 2.16 million additional shares which would boost the size of the offering to approximately $298m.
