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Adaptive Biotechnologies shapes $300m IPO

Jun 28, 2019 • Thierry Heles

Shares in Adaptive Biotechnologies, backed by Microsoft, Celgene, Illumina, LabCorp and BD Biosciences, soared more than 100% on its first day of trading.

Adaptive Biotechnologies, a US-based drug discovery technology developer backed by multiple corporate investors, went public yesterday in a $300m initial public offering.

The company sold 15 million shares priced at $20 each, above its targeted range of $18 to $19, valuing it at more than $2.4bn. Its shares more than doubled in price on its first day of trading on the Nasdaq Global Select Market to close at $40.30.

Founded in 2009 as Adaptive TCR, Adaptive Bio has developed technology intended to understand precisely how an individual patient’s immune system detects and fights disease.

That data, known as clinical immunomics, is fed into a database and forms the basis of treatments for conditions such as cancer, autoimmune disorders and infectious diseases, by exploiting computational biology and machine learning technologies.

The company signed a collaboration and licensing agreement with biotech developer Genentech in a December 2018 deal that included a $300m upfront payment, and which could be worth up to $2bn if milestones and sales targets are met.

Between $80m and $110m of the IPO proceeds have been earmarked for commercial and marketing activities. A further $70 to $100m has been allocated to research and development for Adaptive Bio’s drug discovery programs, and up to $90m for its development of a TCR-Antigen Map that will illustrate the way the immune system interacts with disease.

Adaptive Bio had raised $454m in funding before going public. Software producer Microsoft invested $5m to lead a $50m series F-1 round for the company in late 2017 that also featured Viking Global Investors and Matrix Capital, according to the initial IPO filing.

Matrix previously led a $195m series F round for the company in 2015 that included pharmaceutical firm Celgene, genomics technology producer Illumina, diagnostics service provider LabCorp and laboratory tools supplier BD Biosciences.

The series F also featured life sciences real estate investment trust Alexandria Real Estate Equities, Viking Global, Tiger Global Management, Senator Investment Group, Rock Springs Capital, Casdin Capital and an unnamed healthcare investor.

The only two shareholders that own more than 5% of Adaptive Bio are Viking Global, whose 36% stake was cut to 31.5% in the offering, and Matrix Partners, which came out with 14.3%.

The IPO’s joint lead book-running managers are Goldman Sachs, JP Morgan and BofA Merrill Lynch, while Cowen and Guggenheim Securities are book-running managers and William Blair and BTIG are co-managers.

The underwriters have the 30-day option to buy up to 2.25 million additional shares, increasing the size of the offering to $345m.

Thierry Heles

Thierry Heles is the former editor-at-large of Global University Venturing and Global Corporate Venturing, and was the producer and host of the Beyond the Breakthrough podcast until December 2024.

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