AAA Gritstone rocks $100m IPO

Gritstone rocks $100m IPO

US-based cancer drug developer Gritstone Oncology has gone public in a $100m initial public offering in which biotech company Bluebird Bio bought $10m of shares.

The IPO involved Gritstone issuing almost 6.7 million shares priced at the top of the offering’s $13 to $15 range, giving it a market capitalisation of just over $430m. Its shares closed at $13.45 on their first day of trading on Friday, and at $15.05 yesterday.

Gritstone is working on immunotherapies that will fight cancer by helping a patient’s immune system recognise certain peptide sequences on cancer cells and destroying those tumour cells accordingly.

The company’s lead candidate, GRANITE-001, is designed to be produced uniquely for each patient, and $20m to $25m of the IPO proceeds will support a phase 1/2 clinical trial for the asset.

Between $10m and $15m will go to research and development and $15m to $18m into the ongoing construction of a production facility for Gritstone’s drugs.

The IPO filing states Gritstone raised $61.3m in a 2015 series A round and $96m in a 2017 series B, though contemporary statements claimed they were sized at $102m and $92.7m respectively. It also raised $21m from backers including Redmile Group between June and August this year.

Pharmaceutical firm Eli Lilly led the series B round through its Lilly Asia Ventures unit, investing with GV and Alexandria Venture Investments, subsidiaries of internet technology group Alphabet and real estate investment trust Alexandria Real Estate Equities.

Trinitas Capital, Versant Ventures, Column Group, Clarus Funds and Frazier Healthcare Partners also backed the round, the latter four having invested in the series A with Casdin Capital and a special purpose vehicle known as Transformational Healthcare Opportunity.

Versant Ventures and Column Group remain Gritstone’s largest investors despite their stakes being cut from 14% to 10.8% in the IPO. Other notable investors include Clarus (7.7% post-IPO), Frazier (6.5%), Trinitas (6.4%), Lilly Asia Ventures and Redmile (4.8% each).

Joint book-running managers Goldman Sachs, Cowen and Company and Barclays Capital, and lead manager BTIG have the 30-day option to buy an additional 1 million shares, which would increase the size of the offering to $115m.

By Robert Lavine

Robert Lavine is special features editor for Global Venturing.

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