Reata Pharmaceuticals, a US-based biopharmaceutical company backed by pharmaceutical firms Novo and AbbVie, has secured $60.5m in an initial public offering on Nasdaq.
The company issued 5.5 million shares priced at $11 each. The price was below the $14 to $16 range Reata had set, but the company upped the number of shares from four million.
Reata will put $36m of the proceeds into clinical trials for bardoxolone methyl, a treatment it is developing for pulmonary hypertension, and $15m towards phase 2 trials for omaveloxolone, a candidate to treat diseases including Friedreich’s ataxia, mitochondrial myopathies and metastatic melanoma.
Novo and investment manager CMPG co-led a $78m round for Reata in 2010, bringing its total equity funding to about $180m, before the company raised a further $300m the following year, according to a regulatory filing.
Cardinal Investment, the parent company of CPMG, took part in a $12m round for Reata in 2004, investing alongside Ojai Goliad, StarTech Ventures, RedBird Life Sciences and University of Texas.
Novo’s voting power will be diluted from 16.4% to 14.6% through the offering, while AbbVie’s will be cut from 10.3% to 9.1%. Cardinal representatives will own 25.6% and CPMG representatives will hold 26.6%.
Undisclosed existing backers agreed to buy $29.2m in the offering. Underwriters Citigroup Global Markets, Cowen and Company and Piper Jaffray have the 30-day option to buy another 825,000 shares, boosting the IPO size to $69.6m.