Pharmaceutical firm Roche has scored an exit after US-based vaccine developer Vaxcyte floated on the Nasdaq Global Select Market in a $250m initial public offering.
The company priced more than 15.6 million shares at $16.00 each having previously set a range of $14 to $16 for 14 million shares. It floated on Friday and its shares had risen to $28.52 at close of trading yesterday.
Formerly known as SutroVax, Vaxcyte was spun off by biopharmaceutical company Sutro Biopharma and is working on vaccines using its cell-free protein synthesis platform partially based on technology licensed from Sutro.
The company, which last raised money in March this year, will combine its cash on hand with the IPO proceeds and put $265m into clinical development of its lead candidate, VAX-24, which will combat pneumococcus, the bacteria that causes pneumonia.
VAX-24 is expected to enter clinical trials next year and the IPO proceeds will also fund the expansion of Vaxcyte’s manufacturing resources. It will channel $50m into development of additional vaccine candidates.
Vaxcyte secured $110m in the March round, a series D co-led by RA Capital Management and Janus Henderson Investors that included $2.4m from Roche’s Venture Fund, pushing its overall funding past $280m.
The series D also featured Pivotal BioVenture Partners, the healthcare technology fund co-founded by real estate developer Nan Fung, in addition to TPG Growth, Abingworth, Longitude Capital, Frazier Healthcare Partners, Medicxi, CTI Life Sciences and Foresite Capital.
TPG Growth led Vaxcyte’s $85m series C round in 2018, which included Medicxi, Foresite Capital and existing backers Roche Venture Fund, Pivotal BioVenture Partners, Abingworth, Longitude Capital, Frazier Healthcare Partners and CTI Life Sciences.
Roche subsidiary Roche Finance held a 7.9% stake that was diluted to 5.3% in the offering while Pivotal BioVenture Partners’ 6.5% share was cut to 4.4%.
The company’s largest shareholder remains TPG Growth, with an 8.7% stake post-IPO. Other notable investors include Abingworth (8.6%), Longitude (7.5%), RA Capital and Janus Henderson (6.2% each), Frazier Life Sciences (4.3%) and Medicxi (3.9%).
Joint book-running managers BofA Securities, Jefferies and Evercore ISI and co-managers Cantor and Needham & Company have the 30-day option to buy more than 2.43 million extra shares which would boost the offering to almost $288m.
