Mersana Therapeutics, a US-based antibody drug conjugate (ADC) developer backed by pharmaceutical companies Takeda and Pfizer, raised $75m in an initial public offering yesterday.
The company issued 5 million shares on the Nasdaq Global Select Market priced at $15.00 each, in the middle of the $14 to $16 range it set earlier this month.
Mersana is developing cancer treatments using an ADC platform that will allow for much higher payloads of drugs to be delivered to a patient by simultaneously increasing tolerability.
About $37.5m of the IPO proceeds will support a phase 1 clinical trial for XMT-1522 in breast cancer patients. There are plans to expand XMT-1522 to tests for non-small cell lung cancer (NSCLC) and gastric cancer patient in the future.
A further $19m will go to preclinical activities and a phase 1 trial of XMT-1536, which will target an antigen expressed in ovarian cancer and NSCLC, while another $6m will fund ongoing research. Mersana aims to file a new investigational new drug application every one to two years.
The offering follows approximately $130m of equity funding, $27m of which came in a 2012 series A-1 round led by New Enterprise Associates (NEA) that included Pfizer, which invested $4.1m, F-Prime Capital Partners, Rho Ventures, ProQuest Investments and Harris & Harris Group.
NEA then led a $35.5m series B round in early 2015 that was also backed by Pfizer, F-Prime, Rho Ventures, Rock Springs Capital Master Fund and company CEO Anna Protopapas.
Takeda subsidiary Millennium Pharmaceuticals subsequently joined NEA, Rock Springs and Hadley Harbor Master Investors for a $33.1m series C round in June 2016, investing $10m.
NEA remains Mersana’s largest shareholder, despite its 40.7% stake being diluted to 31.8%. Pfizer is the second largest, with a 9% stake cut from 11.5%, while Millennium’s 5.6% share was cut to 4.4%.
Other notable investors include F-Prime, which has a 7.7% stake post-IPO, Rho Ventures and Rock Springs Capital (5.9% each), Wellington Management Company (4.4%) and ProQuest Investments (4.2%).
Mersana’s stock opened at $14.25 yesterday and briefly rose to $14.70 before closing at $14.00 last night.
JP Morgan, Cowen and Leerink Partners were book-running managers for IPO while Wedbush PacGrow was co-manager. They have a 30-day option to buy another 750,000 shares, which would lift the size of the offering to approximately $86.3m.