University of Pennsylvania spinout Cabaletta has gone public after raising $74.8m in an initial public offering on the Nasdaq Global Select Market.
Cabaletta Bio, a US-based autoimmune disease treatment developer spun out of University of Pennsylvania, has completed a $74.8m initial public offering on the Nasdaq Global Select Market.
The spinout issued 6.8 million shares priced at $11 each, below its target range of $14 to $16. Its shares opened at $10 on the first day of trading last Friday and have so far remained below the IPO price.
Founded in 2017, Cabaletta Bio is focused on treatments for autoimmune diseases that exploit the chimeric auto-antibody receptor, modifying the patient’s T-cells – a form of white blood cell – so they can selectively attack malignant B-cells.
The spinout’s lead candidate, DSG3-CAART, targets mucosal pemphigus vulgaris, an incurable and potentially life-threatening condition that causes fragile blisters to form on the skin and in the lining of the mouth, nose, throat and genitals.
Cabaletta Bio was co-founded by Michael Milone, an associate professor of pathology and laboratory medicine at Penn, together with Aimee Payne, who leads the university’s autoimmune blistering clinic.
The pair were assisted by Cabaletta’s chief executive, Steven Nichtberger, an entrepreneur and adjunct professor at the Penn Department of Health Care Management with experience in healthcare.
Cabaletta Bio raised $50m in a series B round which allowed the university to sell some of its shares to the incoming investors in January 2019.
Deerfield Management, Redmile Group, Cormorant Capital, Adage Capital Management, 5AM Ventures and Adage Capital Management all took part in the series B round, as did Boxer Capital and an unnamed public healthcare entity.
Cabaletta Bio previously closed a $38m series A round in November 2018 led by 5AM Ventures with participation from University of Pennsylvania and Adage Capital Management. The university is also a founding seed investor in Cabaletta Bio.
The spinout has allocated $30m of proceeds to advancing DSG3-CAART through a planned phase 1 trial and $45m to the discovery and preclinical development of additional candidates.
Another $25m will go towards paying research and development staff and $15m will support technology transfer to contract development and manufacturing organisations, and to advance construction of a planned manufacturing facility.
5AM Ventures remains the spinout’s largest shareholder, with a 13.7% shareholding post-IPO, down from 19.2%. Adage and Baker Brothers both own 13.6% following the offering, while Boxer Capital and Deerfield Management retain 3.9% each.
Payne and Milone’s respective stakes of 6.5% have been diluted to 4.6% each.
Morgan Stanley, Cowen, and Evercore ISI are serving as joint book-running managers for the IPO.
