Proteostasis Therapeutics, a US-based cystic fibrosis treatment developer backed by pharmaceutical firms Novartis, Perrigo and Sanofi, floated on Nasdaq yesterday, having priced its shares at $8 each.
The company offered 6.25 million shares, raising $50m in proceeds. The pricing is below its target range of $12 to $14, set last week, though Proteostasis increased the number of shares issued from 3.85 million, placing the offering within its expected size of $46.2m to $53.9m.
The IPO’s underwriters have been granted a 30-day option to purchase another 937,500 shares and if fully exercised this would boost the IPO to $57.5m.
Unnamed existing shareholders indicated their interest to purchase additional shares to the combined value of $30m, but Proteostasis has not yet revealed whether these backers have indeed increased their investment.
Founded in 2006, Proteostasis is working on a treatment for cystic fibrosis, a genetic disorder that is currently incurable and fatal, giving an estimated 70,000 to 100,000 patients across the world a life expectancy of about 40 years.
The proceeds will support the research and development of drug candidates for cystic fibrosis. Protesostasis aims to advance one of them into a phase 1 clinical trial through to completion of a phase 2 clinical trial.
Novartis divisions Novartis Venture Fund (NVF) and Novartis Bioventures, alongside Sanofi subsidiary Sanofi-Genzyme BioVentures and Elan Science One, a subsidiary of Perrigo, took part in Proteostasis’s $37m series B round in September 2015.
The series B round was led by Cormorant Asset Management and further included Fidelity Biosciences, a VC unit of financial services conglomerate Fidelity Investments, Rock Springs Capital, New Enterprise Associates (NEA) and Healthcare Ventures.
Elan Science One,originally a subsidiary of drug developer Elan Corporation, which has since merged with Perrigo, received a 24% stake in Proteostasis in return for a $20m equity investment and $30m of research funding in 2011.
Proteostasis also closed a $70.6m series A round featuring NVF, Genzyme Ventures, Fidelity Biosciences, Healthcare Ventures and NEA in 2011. The company obtained $5m in debt financing in 2014, according to a regulatory filing.
Elan Science One held a 21.6% stake pre-IPO that was diluted to 14.6%, while Novartis Bioventures comes out with a 7.8% share and Sanofi subsidiary Genzyme owns a 3.9% stake.
NEA has an 11.5% stake post-IPO, Healthcare Ventures 9.4% and Fidelity Biosciences, which has rebranded to F-Prime Capital since its investment, 7.9%.
Leerink Partners and RBC Capital Markets are serving as joint bookrunning managers for the offering, while HC Wainwright and Robert W Baird are also acting as underwriters. Proteostasis’ shares were down 17% at the time of closure yesterday, trading at $6.64.