Morphic Therapeutic, a US-based biotechnology developer backed by corporates AbbVie, GlaxoSmithKline, Novo, Pfizer, Schrödinger and ShangPharma, raised $90m in its initial public offering yesterday.
The company issued 6 million shares on the Nasdaq Global Market priced at $15 each, in the middle of the IPO’s range, valuing it at approximately $444m. The offering is expected to conclude on July 1, and the company’s shares closed at $18.00 in their first day of trading.
Founded in 2015, Morphic is developing small molecule drugs aimed at integrins, which are protein receptors responsible for several cellular processes. It is targeting a range of disease areas including fibrosis, vascular disorders, autoimmune diseases and immuno-oncology.
Morphic’s technology is based on research undertaken by Timothy Springer, professor of biological chemistry and molecular pharmacology and a professor of medicine at Harvard University’s Medical School and Boston Children’s Hospital.
The company entered into a strategic collaboration agreement with chemical simulation software producer Schrödinger in 2015 to advance the design of drug candidates, and has also partnered pharmaceutical firms AbbVie and Janssen to co-develop assets.
The IPO follows about $135m in funding, including $80m in a September 2018 series B round co-led by pharmaceutical firm Novo and backed by AbbVie Ventures, SR One and Pfizer Ventures, subsidiaries of pharmaceutical firms AbbVie, GlaxoSmithKline and Pfizer respectively.
Investment firm Omega Funds co-led the series B, which also featured Invus, EcoR1 Capital, Artal International, Polaris Partners and Timothy Springer.
SR One and Pfizer Ventures had previously co-led Morphic’s $51.5m series A round in 2016, investing with AbbVie Ventures, Schrödinger and ShangPharma Investment Group, the corporate venturing arm of pharmaceutical holding firm ShangPharma, in addition to Omega Funds, Polaris Partners and Springer.
The latter two had already participated in a $3m seed round for the company earlier the same year, together with board member Gustav Christensen and president and chief executive Praveen Tipirneni.
Morphic will use the IPO proceeds to fund the further development of a4b7, a treatment it is developing for inflammatory bowel disease, and MORF-720, a candidate for combatting idiopathic pulmonary fibrosis. It will also fund the continued development of its drug discovery platform, Mint.
Springer remains Morphic’s largest shareholder, with a 17.4% stake that was diluted from 21.9%. SR One’s 9.8% stake was cut to 7.8%, while Pfizer retains a 7.4% share and Novo 6.7%. Its other notable shareholders are Omega Funds (9.5% post-IPO), Polaris (7.4%), EcoR1 and Artal International (4.5% each).
Jefferies, Cowen, BMO Capital Markets and Wells Fargo Securities are joint bookrunning managers for the IPO. They have been granted a 30-day option to purchase up to an additional 900,000 shares, which would boost the offering to almost $104m.
– Feature image courtesy of Morphic Therapeutic
