Axcella Health, a US-based metabolic drug developer that counts food and nutritional product supplier Nestlé as an investor, has gone public in a $71.4m initial public offering.
The company issued approximately 3.57 million shares on the Nasdaq Global Market priced at the bottom of the $20 to $22 range it set late last month. Undisclosed existing backers expressed interest in buying up to $39m of shares but Axcella has not revealed whether they did so.
Formerly known as Pronutria Biosciences, Axcella is developing therapies that will utilise endogenous metabolic modulators to treat a range of conditions by effectively reprogramming a patient’s metabolism.
Axcella’s three lead product candidates are all focused on the liver, and it will use the brunt of the IPO proceeds to fund clinical studies as it looks to advance them into full trials. The rest has been earmarked for strengthening its AXA Development Platform.
The offering follows some $172m of funding, including $39m in a 2015 series C round led by investment and financial services group Fidelity Mangement and Research and backed by company builder and existing investor Flagship Ventures, that was later closed at $70m according to the IPO prospectus.
The company added $42.5m in a 2016 series D round featuring Nestlé’s Health Science subsidiary, and $59m in series E funding from unnamed investors in November 2018 according to the prospectus.
Nestlé Health Science’s stake in Axcella was cut from 10.4% to 8.8% in the offering while Flagship Pioneering remains its largest shareholder, with a 35.9% stake post-IPO. Fidelity owns 11.1% and growth equity firm Gurnet Point Capital 5.6%.
Axcella’s shares opened at $20.00 on their first day of trading last week and closed at $13.95 yesterday. Joint book-running managers Goldman Sachs, JP Morgan and SVB Leerink have a 30-day option to acquire more than 530,000 additional shares, taking the IPO’s size to $82.1m.
