US-based rare disease and cancer drug developer SpringWorks Therapeutics has priced its shares at $18 each to raise $162m in an initial public offering that provided exits to pharmaceutical firms Pfizer and GlaxoSmithKline.
The company issued 9 million shares on the Nasdaq Global Select Market at the top of the IPO’s $16 to $18 range. They opened at $24.50 and reached a peak of $26.44 before closing at $22.63 on its first day of trading on Friday, giving it a market cap of more than $744m.
Spun off from Pfizer in 2017, SpringWorks is advancing the development of certain clinical-stage drug candidates for rare diseases and rare, genetically defined cancers originally developed by its parent company.
Approximately $60m to $70m of the IPO proceeds will fund an ongoing phase 3 trial of nirogacestat, a treatment for noncancerous growths known as desmoid tumours and, if results prove successful, the filing for regulatory approval in the US and internationally.
Another $50m to $60m will support a planned phase 2 trial of mirdametinib for neurofibromatosis type 1, a genetic condition that causes tumours to grow along the nerves. SpringWorks will also seek regulatory approval in the US and internationally if the results are favourable.
Some $25m to $35m has been allocated to the further development of the company’s lead assets both as standalone therapies and as combination treatments in new oncology and rare disease indications.
Finally, $10m to $15m will support a phase 1b trial of mirdametinib and lifirafenib, a combination therapy run together with biotechnology producer BeiGene for patients suffering from certain advanced or refractory solid tumours.
SpringWorks previously completed a $125m series B round in April 2019 that was was led by hedge fund sponsor Perceptive Advisors and backed by GlaxoSmithKline and Pfizer Ventures, the corporate venturing arm of Pfizer.
Boxer Capital, HBM Healthcare Investments, BVF Partners, Surveyor Capital, Samsara BioCapital, ArrowMark Partners, Laurion Capital Management, OrbiMed, Bain Capital and medical research charity LifeArc filled out the series B round.
Pfizer, LifeArc and OrbiMed had already contributed to a $103m series A round for the company in 2017 that was led by Bain Capital’s Life Sciences and Double Impact units.
Pfizer owns a 10.9% stake in SpringWorks following the flotation, down from 13.8%, while Bain and OrbiMed have seen their respective 21.7% stakes diluted to 17% each. Perceptive retains a 5% stake, down from 6.4%.
JP Morgan Securities, Goldman Sachs and Cowen and Company are joint book-running managers for the offering, while Wedbush Securities is co-manager. The underwriters have been granted a 30-day option to purchase up to 1.35 million more shares that would boost the size of the IPO to about $186m.
