Biotech IPOs: MBX, Bicara, Zenas Test Market.
After a series of lackluster deals in the biotech sector, the U.S. stock market is set to welcome three IPO companies in the near term: MBX Biosciences, Bicara Therapeutics, and Zenas BioPharma. Their listings will test whether the market's enthusiasm for biotech companies has been rekindled.
Bicara Therapeutics is a clinical-stage biopharmaceutical company dedicated to developing therapeutic solutions to improve cancer patients' treatment outcomes. The company plans to seek a maximum valuation of $828 million in its U.S. initial public offering (IPO) and intends to raise $211.8 million by selling approximately 11.8 million shares, with a price range of $16 to $18 per share. Morgan Stanley and TD Cowen are the lead underwriters for this IPO. Bicara Therapeutics plans to list its common stock on NASDAQ under the ticker symbol "BCAX," with the company headquartered in Boston.
The company focuses on providing transformative bispecific therapies for patients with solid tumors. Its lead program, ficerafusp alfa, is a bispecific antibody that targets the epidermal growth factor receptor (EGFR) monoclonal antibody and a domain that binds to human transforming growth factor-beta (TGF-b). Ficerafusp alfa is initially intended for the treatment of head and neck squamous cell carcinoma (HNSCC), an area with significant unmet needs. The company plans to initiate a pivotal Phase II/III clinical trial of ficerafusp alfa in combination with pembrolizumab for first-line treatment of recurrent/metastatic HNSCC in patients who are not HPV-positive oropharyngeal squamous cell carcinoma by the end of Q4 2024 or early Q1 2025. Supported by global alternative asset management firm TPG and Indian biopharmaceutical company Biocon, Bicara Therapeutics also has investors including F-Prime Capital and Janus Henderson Investors, and has raised a total of $313 million in funding to date.
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MBX Biosciences plans to issue 8.5 million shares of common stock with an expected IPO price of $14 to $16 per share and will be listed on the NASDAQ Global Select Market under the ticker symbol "MBX." J.P. Morgan, Jefferies, Stifel, and Guggenheim Securities are serving as joint bookrunners for the offering. MBX Biosciences focuses on discovering and developing new precision peptide therapies for endocrine and metabolic disorders.
The company possesses a proprietary Precision Endocrine Peptide™ (PEP™) platform aimed at overcoming the key limitations of both unmodified and modified peptide therapies. MBX Biosciences is currently advancing a pipeline of new drug candidates for endocrine and metabolic disorders, including MBX 2109 for the treatment of chronic hypoparathyroidism, MBX 1416 for the treatment of post-bariatric hypoglycemia, and MBX 4291 for the treatment of obesity. MBX Biosciences has received investments from 13 investors, including OrbiMed and NEA, with a total funding amount reaching $238.4 million.
Zenas BioPharma is a biopharmaceutical company focused on immunological therapies, planning to go public in the U.S. with a target valuation of up to $689.7 million. The company plans to raise up to $211.7 million by issuing 11.76 million shares, with an issue price ranging from $16 to $18 per share. It will be listed on the NASDAQ Global Select Market under the ticker symbol "ZBIO." The IPO is underwritten by Morgan Stanley, Jefferies, Citigroup Global Markets, and Guggenheim Securities. The company's lead candidate, obexelimab, is a bispecific monoclonal antibody designed to inhibit the activity of cells associated with various autoimmune diseases without eliminating these cells.
Currently, obexelimab is in development for the treatment of multiple autoimmune diseases. The company plans to initiate a Phase II double-blind, randomized, placebo-controlled trial for multiple sclerosis and systemic lupus erythematosus in the third quarter of 2024, as well as a Phase II/III trial for autoimmune hemolytic anemia. Additionally, the company is conducting a Phase III trial for IgG4-related diseases. Over the past 12 months, Zenas BioPharma has generated revenues of $50 million and incurred a loss of $54.76 million. The company holds $183.93 million in cash, with an operating cash flow of -$80.59 million over the past 12 months. Supported by pharmaceutical giant Bristol-Myers Squibb, Zenas BioPharma's investors also include Fairmount Funds and Norwest Venture Partners, among other investment firms. In June of this year, Zenas BioPharma raised $200 million in Series C preferred stock led by Delos Capital, New Enterprise Associates, Norwest Venture Partners, and SR One. To date, the company has raised a total of $318 million in funding.
This year, drug developers that have raised more than $10 million in U.S. IPOs have underperformed, with six out of 11 companies' stock prices falling below their IPO prices. This trend has industry bankers and lawyers concerned that the market's reaction to this new batch of biotech companies will determine whether other companies can successfully go public later this year or early in 2025. If the aforementioned companies can achieve strong market debuts, it will indicate that the market's interest in early-stage drug developers is improving. During market turmoil, interest in unprofitable biotech companies wanes. In 2020 and 2021, the number of biotech IPOs surged, raising approximately $46.5 billion, surpassing the total of the previous eight years, but this has led to losses for many non-professional investors.
As of September this year, U.S. biotech companies have raised $2 billion through IPOs, a 24% increase compared to the same period last year. However, nearly two-thirds of the funds were raised in the first two months when the industry experienced a frenzy of new share issuance. In the following six months, market interest declined again, with less than $800 million raised, and the industry's share of U.S. IPO fundraising has dropped from 17% in February to 6.5%.
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