Pliant Therapeutics Inc. (NASDAQ:PLRX) has knocked it out of the park since joining the ranks of public companies on Wednesday. Shares of the South San Francisco-based biotech are up about 44% to $26. With an initial public offering priced at $16, the company raised $144 million by selling 9 million shares.
On deck is Legend Biotech, which hopes to raise $350 million in its offering. That would make it the biggest biotech IPO to date this year. The Chinese company, which is a spin off of Genscript Biotech Corp. (HSKE:01548), is striving to create cell therapies to treat diseases that are thought to be incurable, such as hematologic malignancies, solid tumors, infectious diseases and autoimmune diseases.
Legend developed and then licensed to Johnson & Johnson (NYSE:JNJ) a cancer drug that may prove a potent challenger to the leading product from bluebird bio Inc. (NASDAQ:BLUE) and Bristol-Myers Squibb Co. (NYSE:BMY), according to an article in BioPharma Dive.
Pliant, meanwhile, is focused on discovering, developing and commercializing breakthrough treatments for fibrotic diseases. If left untreated, fibrosis can result in scarring of vital organs, causing irreparable damage and eventual organ failure. The company's lead drug for treating idiopathic pulmonary fibrosis is expected to enter phase 2 testing soon.
Novartis (NYSE:NVS), which partnered with Pliant on a potential treatment for nonalcoholic steatohepatitis, agreed to buy $10 million worth of shares in a concurrent stock offering.
Plian Therapeutics scientists are working on developing breakthrough treatments for fibrosis diseases (Photo courtesy of Pliant Therapeutics).
A plethora of other biotechs have made known their intentions to go public. They include:
- Generation Bio is seeking to raise $125 million to accelerate development of a pair of gene therapies for liver disease and get one of them into clinical trials. In 2018, Generation Bio pocketed $25 million in a series A, followed by a meatier $100 million second funding round, according to FierceBiotech. Earlier this year, the company raised $110 million in a series C offering.
- Repare Therapeutics hopes to raise $100 million to help the preclinical company develop cancer drugs for patients that target specific vulnerabilities of tumor cells. Just last week, Repare announced a collaboration with Bristol-Myers that could earn it billions of dollars over the lifetime of the deal
- Forma Therapeutics Inc. is shooting for a $150 million IPO to advance its programs to treat blood diseases, including sickle cell. Last December, the company closed a $100 million series D financing
- SutroVax, formerly known as Vaxcyte, has filed a preliminary prospectus for a $100 million IPO. The vaccine company's lead program is a pneumonia vaccine that that company thinks will provide the same coverage as a Merck & Co. Inc.(MRK) product.
Three recent biotech IPOs have all rewarded investors with rapid appreciation
The healthy flow of biotech IPOs is a surprise to many industry observers given that earlier in the year it was thought that the coronavirus would slow new offerings to a snail's pace. Clearly, that hasn't been the case. Pliant's is the 15th biotech to start trading shares this year. And Investors who backed the seven biotech IPOs since March have seen the value of their shares swell. All are trading at or above their introductory price.
ADC Therapeutics (NYSE:ADCT) raised $233 million in its offering and has since seen its shares nearly double in price to about $35. Zentalis Pharmaceuticals Inc.'s (NASDAQ:ZNTL) stock was offered at $18 and now trades at a shade under $52.
Jon Norris, a managing director in SVB's Healthcare Practice, recently told BioPharma Dive that the IPO activity just means that people see the biotech industry as one that offers solid growth opportunities. "If you see good returns, people are not going to be quick to exit the market," he explained. Furthermore, the pandemic has put pharma and biotech companies in the spotlight as people realize the life sciences industry is best equipped to provide answers to the virus in the form of vaccines and treatments.
Disclosure: The author holds positions in Johnson & Johnson and Bristol-Myers Squibb.
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This article first appeared on GuruFocus.