Galapagos, a Belgium-based biotechnology company backed by pharmaceutical firm Johnson & Johnson, raised $275m from an initial public offering on Nasdaq yesterday.
The company issued 6.55 million shares priced at $42.05 each. The underwriters have the option to buy an additional 750,000 shares, which would boost the size of the offering to more than $306m.
Galapagos is developing small-molecule treatments for inflammatory-related diseases including rheumatoid arthritis, inflammatory bowel disease, cystic fibrosis and pulmonary disease.
The company plans to invest $80m of the proceeds in advancing its cystic fibrosis drug candidate through Phase 2 trials, $65m to push its inflammatory bowel disease candidate to the end of Phase 2 clinical development and $30m to develop its earlier-stage programmes.
Johnson & Johnson bought $25m of stock in the IPO, but its stake in the company has fallen from 7.6% to 6.3%. Pharmaceutical company AbbVie, a strategic partner of Galapagos, acquired $30m of stock and will end up with a stake sized at around 1.9%.
The other notable investors in Galapagos, which was already listed on the Euronext market in Brussels and Amsterdam, are Van Herk Investments, whose 5.1% stake will be diluted to 4.2%, and Capital Group, the owner of a 5% stake that will be diluted to 4.2%.
Morgan Stanley, Credit Suisse and Cowen and Company are acting as joint book-running managers for the offering, while Nomura and Bryan, Garnier & Co are the co-managers. Galapagos’ shares opened at $46.30 yesterday and closed at $50.50.