Orphan disease drug developer PhaseBio Pharmaceuticals, which is commercialising research from Duke University, cut the price of its shares sharply pre-offering.
PhaseBio Pharmaceuticals, a US-based orphan disease treatment developer exploiting research from Duke University, has floated on the Nasdaq Global Market in a $46m initial public offering.
The company priced its shares at $5.00 each, representing a steep drop from the $12 to $14 range it set earlier this month, though it did also increase the number of shares in the offering from 5 million to 9.2 million. Its shares opened at $5.55 on Thursday and closed at $5.01 yesterday.
PhaseBio is developing treatments for orphan diseases – those recognised as affecting fewer than 200,000 people across the world – and is initially concentrating on cardiopulmonary disorders that affect the heart and lungs.
The platform uses elastin-like polypeptide (ELP) technology, which in turn relies on synthesised biopolymers. ELP was developed by co-founder Ashutosh Chilkoti, a professor in Duke’s biomedical engineering department.
PhaseBio originally owned the full rights to ELP, but sublicensed it back to the university for the development of long-acting cancer drugs with minimal toxic side effects in 2016.
The IPO proceeds will support the progress of PhaseBio’s product candidates. Its lead candidate, PB2452, is being developed as a reversal agent for patients taking ticagrelor, an antiplatelet drug produced by AstraZeneca, who are experiencing major bleeding.
PB2452 has just completed a phase 1 clinical trial, and additional capital will go to PB1046, a fusion protein in a phase 2b trial for pulmonary arterial hypertension, which affects the travel of blood from the heart to the lungs.
PhaseBio had raised approximately $139m in venture funding, as of a $34m series D round last month in which AstraZeneca and Johnson & Johnson both took part, the latter through corporate venturing vehicle Johnson & Johnson Innovation – JJDC.
New Enterprise Associates (NEA), Hatteras Venture Partners, Cormorant Asset Management, Rock Springs Capital, Mountain Group Partners, Syno Capital and Fletcher Spaght Ventures also contributed to the round.
JJDC first invested in PhaseBio as part of a $48.4m series B round that was led by NEA and backed by Astellas unit Astellas Venture Management, Hatteras Venture Partners and Fletcher Spaght Ventures in 2012.
AstraZeneca led the company’s $40m series C round in 2015, investing with Johnson & Johnson Innovation – JJDC, NEA, Hatteras Venture Partners and Fletcher Spaght Ventures.
Zeneca, part of AstraZeneca, held a 16.4% stake in PhaseBio that was diluted to 10.1% in the offering while JJDC’s was cut from 10.1% to 6.2%. The company’s largest shareholder is NEA (20.3% post-IPO) while Hatteras now owns 9.1% and Fletcher Spaght 3.8%.
Joint book-running managers Citigroup, Cowen and Stifel and co-manager Needham & Company have been granted the 30-day option to buy another 1.38 million shares which would increase the size of the IPO to $52.9m.
– A version of this article first appeared on our sister site, Global Corporate Venturing.
