US-based oncology drug developer Kronos Bio went public in a $250m initial public offering on the Nasdaq Global Select Market on Friday, providing an exit for internet and technology conglomerate Alphabet.
The size of the offering was increased from almost 10.3 million shares to more than 13.1 million and they were priced at $19.00 each, above the $16 to $18 range set by the company last week. Its shares closed at $27.07 on Friday, valuing the company at more than $1.4bn.
Kronos is working on precision cancer treatments that will utilise a function known as dysregulated transcription, and its technology is based on research conducted at Massachusetts Institute of Technology.
Up to $90m of the IPO proceeds will fund a registrational phase 2/3 clinical trial for the company’s lead drug candidate, entospletinib, for acute myeloid leukaemia. Between $20m and $30m has been earmarked for a phase 1/2 trial for a second candidate, KB-0742, in advanced solid tumours.
Fidelity, Commodore Capital, EcoR1 Capital, Surveyor Capital, Woodline Partners, Perceptive Advisors, funds and accounts managed by BlackRock, funds affiliated with Casdin Partners, funds and accounts advised by T. Rowe Price, and all existing Kronos investors had supplied $155m in convertible note financing in August 2020.
Alphabet unit GV took part in the company’s $105m series A round for Kronos in July 2019 that was co-led by Omega Funds and Vida Ventures and also backed by Nextech, Perceptive Advisors, Invus, Polaris Partners and various Kronos board members.
Omega Funds, Vida Ventures, BellCo Capital, Kronos CEO Norbert Bischofberger and John Martin had provided $18 for the company in 2018.
The only external investors with stakes in Kronos sized higher than 5% prior to the offering were Omega Funds, owner of a 10% stake cut to 6.3% in the offering, and Vida Ventures, the holder of a 4.4% share post-IPO.
Goldman Sachs, Jefferies, Cowen and Piper Sandler are joint book-running managers for the IPO and have 30 days to buy almost 2 million more shares which would theoretically increase the size of the offering to more than $287m.
