Seres Therapeutics, a US-based bacterial infection treatment developer backed by food and nutrition product maker Nestlé and health researcher Mayo Clinic, priced its $134m initial public offering yesterday.
The company is issuing more than 7.4 million shares priced at $18 each, above the $15 to $17 range it set last week. It will begin trading on Nasdaq later today.
Seres will spend $25m of the IPO proceeds to complete a Phase 2 clinical study for SER-109, its lead product candidate, which is being developed for the treatment of Clostridium difficile infection, a type of colon infection.
A further $40m will support development of three more product candidates that it aims to advance through pre-clinical studies.
Seres had raised approximately $134m in venture funding, $65m of which was invested by Nestlé in January this year. Mayo Clinic took part in the company’s $10m series B round in June 2014 together with venture capital firms Enso Ventures and Flagship Ventures.
Nestlé Health Science, Nestlé’s health and nutrition subsidiary, held an 18.3% share of Seres prior to the IPO, which would have been diluted to 15.2% through the offering.
Nestlé had expressed interest in buying an additional $19m of shares in the IPO, but neither company has revealed whether it followed through on that interest.
Flagship Ventures remains Seres’ largest shareholder, despite its 54.7% stake being diluted to 45.4% in the offering. Mayo Clinic owns less than 5% of the company, but other notable shareholders include Fidelity Management & Research Company (a 6.7% stake post-IPO) and Enso (4.9%).
Goldman Sachs and BofA Merrill Lynch are joint book-running managers for the IPO, while and Leerink Partners and Canaccord Genuity are the lead managers.
The underwriters have the 30-day option to acquire an additional 1.1 million shares, which would life the size of the offering to about $154m.