The IPO market for the health sector had a slow week for Veteran’s Day with just three small deals priced, registered and withdrawn. Five more industry-wide deals are getting out ahead of Thanksgiving this coming week, according to Renaissance Capital, including billion-dollar crypto mining company Canaan (Nasdaq:CAN).
Some big IPOs filed last week, targeting early December launches. Three could be valued at more than $5 billion: consumer products maker Reynolds Consumer, China-based “tech-as-a-service” provider OneConnect, and fast-growing Brazilian financial firm XP Inc.
The IPO market is “hot on coffee and cool on pot,” says Bill Smith at Renaissance. Chinese coffee chain Luckin was the week’s winner, up 46% after beating on top line growth. Meanwhile, cannabis producer Tilray continued its swoon, down 15% after worse-than-expected losses.
Here’s the cooled-down action in healthcare IPOs after a torrid start to November.
89bio Inc., a Phase 1 biotech developing therapies for NASH and other metabolic diseases, raised $85 million by offering 5.3 million shares at $16, within the range of $15 to $17, to command a market value of $225 million. The company originally planned to raise $70 million by offering 4.4 million shares at the same range. Nonalcoholic fatty liver disease (NAFLD) is a condition in which fat builds up in the liver. The cause of non-alcoholic fatty liver disease (NAFLD) is unknown. Risk factors include obesity, gastric bypass surgery, high cholesterol, and type 2 diabetes. Nonalcoholic steatohepatitis (NASH) is a type of NAFLD.
89bio’s target indication represents a multi-billion-dollar market with no FDA-approved therapy. As a result, there are many other NASH-focused biotechs, most of which are later-stage. NASH biotechs as a whole have not done well, save for June IPO, Akero Therapeutics Inc. (Nasdaq:AKRO), +28% from its IPO.
89bio was founded in 2018, and the San Francisco, CA-based company lists on the Nasdaq under the symbol “ETNB.” BofA Securities and SVB Leerink acted as lead managers on the deal. Shares closed the week up 6% at $17.
Elsewhere, Chinese biotech AnPac Bio-Medical Science Co. Ltd. registered up to $20 million in an initial public offering in New York. Based in Lishui, Zhejiang Province, AnPac sells technology for the screening and detection of the occurrence of various cancers in humans. The technology is comprised of AnPac’s patented cancer differentiation analysis (CDA) and cancer-detection device. The company also offers tests combining its CDA technology with supplementary technology such as biomarker-based tools, as AnPac stated in its preliminary prospectus filed with the US Securities and Exchange Commission.
AnPac said in its filing that it was among the first in the world to develop technology that uses sensors to assess the biophysical properties of blood for the detection and measurement of cancers, citing research by market analyst Frost & Sullivan. As of September 2019, AnPac said its technology detected the risks of 26 types of cancers, which accounted for more than 80% of cancers in China, with high accuracy.
For the nine months through September, AnPac reported revenue of $1.1 million, up 22% year-over-year, on losses of $8.3 million. In 2018, the company made $1.4 million in revenue and had $5.9 million in losses. It had $3.4 million in cash and cash equivalents as of Sep. 30. Underwriter on the offering, WestPark Capital Inc., may purchase up to an additional $1.7 million in shares, according to the filing. AnPac expects to list on the Nasdaq Global Market as “ANPC.” The exact amount of the offering and the pricing of the company’s American depositary shares have yet to be determined. (Ref: CapitalWatch)
And Inhibrx Inc., which is using protein engineering to develop targeted therapies for cancer and rare diseases, withdrew its plans for an initial public offering on Friday. It originally filed in June 2019 with a proposed deal size of $75 million. The La Jolla, CA-based company was founded in 2010 and booked $15 million in license and grant revenue for the 12 months ended June 30, 2019. It had planned to list on the Nasdaq under the symbol “INBX.” Evercore ISI, Barclays and Nomura Securities were set to be the joint bookrunners on the deal.
Have a great week!
Founder & Editor