US-based pharmaceutical company Zosano Pharma raised $47.5m in an initial public offering on Nasdaq yesterday, with pharmaceutical firm Eli Lilly investing $15m in a concurrent private placement.
Founded in 2006, Zosano is working on a microneedle patch system that can deliver drugs to treat osteoporosis, hypoglycaemia and migraine. It issued 4.5 million shares priced at $11 each.
The company plans to invest $15m of the proceeds on clinical development of its ZP technology, $3m on upgrading its manufacturing capabilities and a further $3m to repay part of a loan from Hercules Technology Growth Capital.
Eli Lilly picked up an 11.5% stake through the offering, after forming a strategic partnership with Zosano in November 2014.
BioMed Ventures remains Zosano’s largest shareholder, despite its 43.5% stake being diluted to 20.4%, while New Enterprise Associates holds an 18.1% share post-IPO, diluted from 38.8%.
Zosano had raised more than $143m in equity and debt since it was founded, according to press reports and SEC filings. It originally filed for a $70m IPO in July 2014, only to subsequently postpone the offering.
Joint book-running managers Ladenburg Thalmann and Roth Capital Partners have the 30-day option to buy another 675,000 shares, which would boost the size of the offering to approximately $54.9m.