US-based cancer therapy developer Revolution Medicines raised $238m yesterday in an initial public offering on the Nasdaq Global Market that scored an exit for pharmaceutical company Sanofi.
The company priced its shares at the top of a $15 to $17 range that had been upsized from the IPO’s original $14 to $16 range, set last week, increasing the number of shares in the offering from 10 million to 14 million at the same time.
The shares rose 70% to close at $28.90 on their first day of trading, valuing Revolution at just under $1.65bn. Joint book-running managers JP Morgan, Cowen, Guggenheim Securities and SVB Leerink have the opportunity to buy a further 2.1 million shares which would lift the size of the offering to nearly $274m.
Revolution is working on oncology drugs designed to target selected proteins that play a significant role in cancer. Up to $175m of the IPO proceeds will fund the development of drug candidates focusing on the Ras protein pathway.
Between $25m and $30m will support the progress of a second candidate through to the start of phase 1 clinical trials, and Sanofi is in line for a $1m payment associated with research costs for a candidate on which they are collaborating.
Sanofi subsidiary Sanofi Research Invest held a 7.8% stake in the company, secured when Revolution bought genomic therapy developer Warp Drive Bio in an all-share deal in late 2018, that was cut to 5.9% in the offering.
Revolution’s largest shareholders are venture capital firm and founding investor Third Rock Ventures, owner of a 21.7% stake post-IPO, and healthcare-focused VC firm Column Group which emerged with 14%.
The company had raised a total of $226m in funding from investors also including financial services and investment group Fidelity Management & Research, Boxer Capital, Deerfield Management, Cormorant Capital, Vivo Capital, Schroder Adveq, Casdin Capital, Nextech Invest and Biotechnology Value Fund.
