Flex Pharma, a US-based developer of treatments for neuromuscular conditions, priced its initial public offering at $16.00 per share yesterday, and is set to raise $86.4m when it floats today.
The company raised $40m in a series A round in August 2014 backed by conglomerate Kraft Group, Longwood Fund, Bessemer Venture Partners, EcoR1 Capital, Jennison Associates, Lightstone Ventures, Alexandria Equities, CD-Venture, Bindley Capital Partners and City Hill Ventures.
Founded last year, Flex is working on treating nocturnal leg cramps and spasms, and plans to begin work on a proof-of-concept study for its leg cramp treatment in the second quarter of 2015.
Flex will put $30.1m of the IPO proceeds towards research and development and a further $11.1m into sales and marketing. The cash is expected to fund the company through 2017.
Longwood Fund owns a 19.2% stake in Flex that will be diluted to 14% in the offering, while the company’s other notable shareholder, Bessemer, will have its share diluted from 9.8% to 7.2%.
Jefferies and Piper Jaffray are the joint book-running managers for the IPO. JMP Securities is serving as lead manager and Cantor Fitzgerald and Roth Capital Partners as co-managers.
The underwriters have the 30-day option to buy another 810,000 shares, which would increase the offering to about $99.4m.