US-based autoimmune disease drug developer Kezar Life Sciences closed an $86.3m initial public offering on the Nasdaq Global Select Market yesterday, providing an exit to biopharmaceutical company Onyx Therapeutics.
Kezar issued 5 million shares priced at $15 on its Thursday, securing $75m, before underwriters exercised their option to purchase an additional 750,000 shares. It is trading at $17.34 at time of publication, with a market cap of $314m.
Founded in 2015, Kezar is working on therapies for autoimmune disorders and malignant diseases. Its lead candidate, KZR-616, is set to enter phase a 1b/2 trial in autoimmune conditions lupus and lupus nephritis, the latter of which specifically affects the kidneys.
Kezar expects to launch four additional trials for KZR-616 in 2019 for other indications, including idiopathic inflammatory myopathies, a group of conditions that lead to an inflammation of muscles used for movement.
The company will also use the IPO proceeds to advance discovery and preclinical programs, and to fund other research and development activities. KZR-616 was licensed from Onyx in 2015, giving the company a minority stake in Kezar.
The company had raised $73m in equity funding before the IPO, most recently closing an oversubscribed $50m series B round in July 2017 that was co-led by Cormorant Asset Management and Morningside Venture.
Cowen Healthcare Investments, Pappas Ventures, Qiming Venture Partners, Bay City Capital, EcoR1 Capital, Omega Funds, and Aju IB Investment also contributed to the series B round.
Morningside, Cormorant, EcoR1, 9W Capital Management, Omega Funds, Aju IB Investment and assorted angel investors had previously supplied $23m in series A funding in 2015, at the same time that Onyx provided the KZR-616 licence.
Onyx held an 8.4% stake ahead of the flotation, which had been diluted to 6.1% before the underwriters took up the over-allotment option.
Morningside owned an 11.2% stake at the time of the flotation, Comorant 7.2%, Cowen 5.5%, EcoR1 4% and Omega Fund IV 3.8%.
Jefferies and Cowen were joint book-running managers for the offering while Wells Fargo Securities and William Blair were also bookrunners.