Kardigan’s IPO haul has come in 14% above expectations, grossing $400 million after the cardiovascular disease biotech upsized the offering and hit the top end of its target range.
Last week, Kardigan set out plans to offer 23.3 million shares priced between $14 and $16. At the midpoint of the range, the planned offering would have generated $349.5 million. Kardigan upsized the offering ahead of its Nasdaq debut on Friday. In the end, the biotech sold 25 million shares at $16 each, raising gross proceeds of $400 million.
Kardigan also upsized its overallotment. Having initially planned to offer an additional 3.5 million shares, the biotech bumped the overallotment up to 3.75 million shares late on Thursday. At $16 a share, the overallotment could gross an additional $60 million for Kardigan if underwriters exercise their full option in the next 30 days.
Kardigan CFO Brianne Puglisi says the extra boost will be necessary given the company's plans. “Within the next 12 months, we’ll see data from all three of our clinical-stage programs, so those are meaningful value collection points,” she told Fierce Biotech. “We want to make sure that the company is completely capitalized well beyond that.”
With Kardigan sitting on $287.1 million at the end of March, the bumper IPO haul will position the biotech to advance three assets into phase 3. Before upsizing its offering, the company allocated $80 million to $90 million each to danicamtiv and ataciguat, plus $40 million to $50 million to tonlamarsen. For each asset, the money is intended to enable Kardigan to deliver phase 2b data and start phase 3 development.
The unique pipeline was a major factor as the company went on the road raising money.
“There’s a ton of energy around the company, which is trying to put a dent in cardiovascular disease. We don’t see a lot of companies doing what we’re doing at this scale or at this stage,” Puglisi said. “Advancing these three programs simultaneously was key. They’re each in a meaningful market where there are no approved therapies.”
The Prolaio platform is a key element of Kardigan’s clinical development strategy. Kardigan, which bought the platform last year, is betting that Prolaio’s capabilities, such as artificial intelligence-enabled tools, will improve patient identification and enrollment while supporting continuous real-world data collection. If the platform lives up to expectations, Kardigan could pay up to $200 million in milestones to former Prolaio investors.
“It’s all about Kardigan’s differentiated approach. One element is leveraging technology and embedding Prolaio in all of our clinical trials. Next is a precision approach to cardiovascular medicine and finding targeted medicines and matching them with the patients that we would expect to benefit most,” Puglisi said. “Prolaio is one of the elements that differentiate us in just how we think about drug development and how we’re approaching each of these programs.”
Digital clinical endpoints are among the features Kardigan envisages for Prolaio. However, the biotech warned IPO investors that the FDA may not accept digital clinical endpoints collected through its Prolaio platform, necessitating additional validation work, modifications to the trial design, or the collection of additional clinical endpoint data. The additional work could delay development timelines, Kardigan said.
Kardigan will use Prolaio data collection in the post-discharge period of its phase 2 trial of tonlamarsen, an antisense oligonucleotide, in acute severe hypertension. The biotech plans to use the platform to characterize blood pressure control, blood pressure excursions and cardiovascular parameters.
The Kardigan IPO adds to a steady stream of recent biotech offerings, including Parabilis’ record-breaking $670 million haul and Kailera’s $625 million market debut before that.
“I’m excited about what’s ahead. It feels like there’s a small moment when we can all take a breath and a quick nap, and then we’re back to work,” Puglisi said. “By this time next year, we’re going to have a lot of data, and that will be even more exciting milestone for the company.”
Editor's Note: The story was updated at 2:15 p.m. ET to include additional comments from an interview with Kardigan CFO Brianne Puglisi.