US-based rare disease drug developer Fulcrum Therapeutics raised $72m in its initial public offering on Wednesday, providing exits to pharmaceutical firms GlaxoSmithKline (GSK), Sanofi and WuXi AppTec.
The company issued 4.5 million shares priced at $16 each to list on the Nasdaq Global Market. Shares suffered a drop to $12.86 on the first day of trading, before rising slightly back up to $13.50, giving Fulcrum a market cap of $315m.
Founded in 2015, Fulcrum is developing therapies for rare genetically-defined conditions.
The company will put proceeds from the offering, combined with its existing cash reserves of $62.5m, towards a phase 2b trial of its lead asset, a treatment for facioscapulohumeral muscular dystrophy therapy called Losmapimod it licensed from GSK.
With approximately $45m allocated to Losmapimod’s development, another $15m will go towards advancing treatments for haemoglobinopathies – blood related diseases or disorders. Some $30m have been set aside for continued drug discovery efforts.
Fulcrum collected $140m in equity funding before the offering, including $55m provided by venture capital firm and founding investor Third Rock Ventures in 2016. GV, an investment unit of technology conglomerate Alphabet, later added $5m in a series A extension in 2017.
Sanofi Ventures, the corporate venturing arm of Sanofi, and 6 Dimensions Capital, an investment firm co-founded by WuXi AppTec and Frontline BioVentures, contributed to an $80m series B round in September 2018.
Foresite Capital led the series B round, while financial services and investment group Fidelity, Casdin Capital, Section 32, NS Investments and entities affiliated with Leerink Partners also took part.
GSK’s shareholding has been diluted from 9.5% to 7.7% following the IPO, while Third Rock remains the company’s largest shareholder with a 34.9% stake (down from 43.2%). Foresite Capital retains 6.4%, from a previous 8%.
Morgan Stanley, BofA Securities and SVB Leerink are serving as underwriters for the offering and have been granted a 30-day option to acquire up to an additional 675,000 shares.
