US-based genetic disease drug developer Stoke Therapeutics will raise approximately $142m when it floats later today, providing an exit for life sciences real estate investment trust Alexandria Real Estate Equities.
The company priced its shares at $18.00 each, above the IPO’s $14 to $16 range. It also increased the number of shares from 6.7 million to just over 7.89 million and is listing on the Nasdaq Global Select Market, at a valuation of about $566m.
Stoke is developing therapies that will treat severe genetic diseases in which a patient has a healthy copy of a gene together with a mutated copy. The drugs are intended to upregulate protein expression in order to bring the levels of target proteins back to normal.
The proceeds will support the progress of Stoke’s lead drug candidate, STK-001, to the start of a phase 3 clinical trial. STK-001 is being developed to treat a genetic form of epilepsy known as Dravet syndrome.
The company also plans to identify an additional candidate, for a different genetic disease, with an aim to initiate preclinical studies followed by a phase 1/2 study in the first half of 2020.
Stoke raised a total of $38m in series A funding from venture capital firm and founding investor Apple Tree Partners between 2015 and January 2018, according to the IPO filing.
Investment firm RTW Investments led Stoke’s $90m series B round in October 2018, which also featured Alexandria Real Estate Equities’ VC subsidiary, Alexandria Venture Investments.
Apple Tree Partners, Perceptive Advisors, Redmile Group, RA Capital Management, Cormorant Asset Management, Sphera Funds Management and funds managed by Janus Henderson Investors also contributed to the series B.
Alexandria Venture Investments’ stake was sized at less than 5% pre-IPO. Apple Tree’s 65.3% stake is being cut to 49% in the offering while RTW Investments’ share was cut from 11.9% to 8.9%.
JP Morgan Securities, Cowen and Company and Credit Suisse Securities (USA) are joint book-running managers for the IPO while Canaccord Genuity is lead manager. They have a 30-day option to buy a further 1.18 million shares to boost the offering to more than $163m.
