Entasis Therapeutics, a US-based antibacterial product developer spun off from pharmaceutical firm Astra Zeneca, raised $75m in an initial public offering on Wednesday, with pharmaceutical company Novo buying $16.3m of shares.
The IPO priced its shares at $15 each on the Nasdaq Global Market, below the $16 to $18 range, but increased the number of shares in the offering from 4.4 million to 5 million.
Existing shareholders including Novo bought almost 3.3 million of those shares, and the company had a market capitalisation of $208m at its flotation according to Nasdaq. Its shares closed at $10 yesterday.
Founded in 2015, Entasis is working on antibacterial biopharmaceuticals to treat infections caused by Gram-negative bacteria that have proven resistant to multiple drugs. It will put $50m of the IPO proceeds into a phase 3 clinical trial for its lead product candidate, ETX2514SUL.
Another $14m will go to an initiative involving the creation of a new class of antibiotics known as non-b-lactam inhibitors of the penicillin-binding proteins (NBPs), while $3m will support a phase 1 trial for a second candidate, ETX0282CPDP.
Entasis secured an initial $40m in financing in 2015 before closing an $81.9m series B round that included Novo in September 2017.
Novo took part in the $31.9m second tranche alongside private equity group TPG, venture capital firms Clarus Ventures, Sofinnova Ventures and Frazier Healthcare Partners, VC fund Pivotal BioVenture Partners and investment adviser Eventide Fund.
The company has not disclosed precise details of which investors are buying shares in the IPO, but the filing states Astra Zeneca’s stake was diluted from 23.7% to 14.6% prior to any purchases.
Novo’s stake would equate to 8.3%, though the share purchase in the IPO would effectively double its size. Other notable investors post-IPO, pre-share purchase include Clarus (8.9%), Frazier (7.4%), Pivotal and Sofinnova (6.4% each), TPG Biotech (5.8%) and Eventide (3.7%).
Credit Suisse and BMO Capital Markets are joint book-running managers for the IPO while SunTrust Robinson Humphrey and Wedbush PacGrow are co-managers. They have a 30-day option to buy another 750,000 shares, which would increase the offering’s size to approximately $87.3m.
