US-based endocrine disorder drug developer Spruce Biosciences has set the terms for an initial public offering sized up to $80m that would enable pharmaceutical company Novo to exit.
The offering is set to involve the company issuing 5 million shares on the Nasdaq Global Market priced between $14 and $16 each. It would be valued at about $340m if it floats at the top of that range.
Spruce is developing a non-steroidal therapy called tildacerfont for a life-threatening genetic disease known as congenital adrenal hyperplasia (CAH), and $5m of the IPO proceeds will fund two phase 2b clinical trials for tildacerfont in adult patients suffering from classic CAH.
Another $20m will support new drug application and commercial preparation activities for tildacerfont while $40m will be put into research and development for classic CAH and other rare endocrine disorders in children.
The company raised $15m from Novo and $5m from RiverVest Venture Partners in a 2017 series A round, and they bought a further $8m of series A shares in 2019, according to the IPO filing.
Omega Funds and Abingworth co-led an $88m series B round for Spruce in February this year that included Novo, RiverVest, HealthCap Partners, Rock Springs Capital, Surveyor Capital, Aisling Capital, Sands Capital and Citadel.
The same investors returned to provide the same amount for the company six months later, according to the filing, Novo having supplied a total of $12m across the two tranches.
Novo is Spruce’s largest shareholder, with a 29.1% stake set to be cut to 22.3% in the offering. Its other key investors are Omega Fund (9% post-IPO), RiverVest (8.9%), HealthCap (8.4%), Abingworth (7.5%), Rock Springs (4.8%), Aisling Capital and Citadel (4.5% each).
Cowen and Company, SVB Leerink, Credit Suisse Securities (USA) and RBC Capital Markets are the underwriters for the offering.
