If you’re looking for a sign that biotech’s IPO renaissance remains on track then the pair of upsized Nasdaq listings on Friday morning is a good place to start.
Both depression-focused Seaport Therapeutics and clotting company Hemab Therapeutics had been priming investors earlier this week to expect IPOs of around the $180 million range. But the companies significantly overshot their targets.
Boston-based Seaport sold nearly 14.2 million shares for its offering—flying past the 11.8 million shares that the company had been expecting as recently as Monday. With the shares priced at $18 apiece, it means the biotech will rake in $254.9 million in gross proceeds from the IPO.
This haul could rise by an additional $38.2 million if underwriters fully take up their option to buy a further 2.1 million shares.
Industry insiders had speculated to Fierce earlier last month that a sudden pause in biotech IPOs in March could have been triggered by a frenzy of Big Pharma dealmaking. But Seaport CEO Daphne Zohar said the “rationale behind going public” was that the biotech is “basically functioning very much like a public company right now.”
Zohar co-founded Karuna Therapeutics, the neuroscience biotech bought by Bristol Myers Squibb for $14 billion to acquire the schizophrenia drug that would hit the market as Cobenfy.
When asked by Fierce why Seaport hadn’t also opted for a Big Pharma acquisition, Zohar suggested that companies try and keep both options open.
“If you had spoken to anybody at Karuna even a month or two before they were acquired by BMS, their answer would be probably very similar to mine,” she said in an interview. “It is that we are focused on developing our medicines and potentially bringing them all the way to patients.”
“It’s part of the business model in biotech that companies that are developing important medicines that impact a broad population are of interest to pharma companies,” she added. “But we're also seeing successful launches.”
Zohar pointed to the track record of Sharon Mates, Ph.D., who joined Seaport’s board this week. As co-founder and CEO of Intra-Cellular Therapies until its acquisition by Johnson & Johnson last year, Mates developed and secured approval for the major depressive disorder (MDD) drug Caplyta.
“She built and ran Intra-Cellular,” Zohar said. “She brought Caplyta to market [and] was able to generate sales from the launch until the acquisition of about $1.5 billion.”
“It used to be that M&A was the only way to go, and I think that there’s now a clear path for companies to advance their medicines on their own,” Zohar said.
So how far is Seaport planning to go on its own? Is the strategy to bring its pipeline of depression drugs to market by itself?
“We're very committed to these programs,” the CEO responded. “We think that they have tremendous potential to really make a difference for patients, and as such, we want to develop those programs as far as we can ourselves.”
These programs are led by SPT-300, also known as GlyphAllo. The therapy is a prodrug of allopregnanolone—a naturally occurring neurosteroid that is marketed in a synthetic form as Zulresso for postpartum depression.
GlyphAllo has been developed leveraging Seaport’s Glyph platform, which is designed to enhance the bioavailability of oral drugs by reducing their metabolism in the body before they reach their intended target. The idea is that this should, in turn, reduce hepatotoxicity and other side effects.
Seaport has previously suggested that $121 million will be used to fund an ongoing phase 2b study of SPT-300 in MDD through to a topline readout next year, as well as launch a phase 3 study.
Meanwhile, $97 million has been earmarked to complete phase 2 studies of SPT-320, also known as GlyphAgo, a prodrug of agomelatine—an antidepressant available in Europe as Valdoxan but not approved by the FDA. Seaport has been banking on the ability of its Glyph platform to lower the dose required for effectiveness by reducing its metabolism in the liver and therefore removing the need for liver function monitoring.
The biotech read out phase 1 data for GlyphAgo in healthy volunteers last month that appeared to back up this theory, achieving therapeutic exposures of agomelatine at doses projected to avoid liver enzyme elevations and reduce or eliminate the need for liver function testing.
Seaport’s Chief Scientific Officer Michael Chen, Ph.D., told Fierce that this data proved that the biotech is “not a single asset company.”
It also “reinforces the actual Glyph platform,” he added. “So it's now the second clinical validation of the platform, which allows us to then look forward to generating additional programs.”
Beyond GlyphAllo and GlyphAgo, the company is also working on SPT-348, a prodrug of a non-hallucinogenic analog of LSD.
But despite having entered the year with $233.7 million in the bank and $254.9 million in IPO proceeds on the way, it doesn’t sound like Zohar and her team are planning to upsize their spending plans.
“I kind of grew up in in my career in a capital constraint format, and so I am a big fan of capital discipline and not building out beyond what you need,” she told Fierce. “You could expect that we'll continue to be very capital efficient and focused on data.”
Hemab hits $300M mark
Seaport’s stock began trading on the Nasdaq this morning under the ticker “SPTX.” It was joined by another biotech entrant in the form of Hemab.
Like Seaport, Hemab had been banking on an IPO of around $180 million, but the end result has come out above $300 million, according to an April 30 release.
The Cambridge, Massachusetts- and Copenhagen, Denmark-based company has sold 16.7 million shares—overshooting the 11.7 million shares it had expected as recently as Monday.
Priced at $18 per share, it means Hemab is now set for gross proceeds of $301.5 million—with potentially a further $45 million to come if underwriters take up their option to buy a further 2.5 million shares.
Top of the list of spending priorities is the bispecific antibody sutacimig, which Hemab has already tested in Glanzmann thrombasthenia, a rare genetic bleeding disorder caused by a deficiency of the platelet integrin alpha IIb beta3, which prevents blood from properly clotting.
The biotech, which has a stated desire to become “the ultimate clotting company,” has previously pointed to a phase 2 study as demonstrating that sutacimig achieved clinically meaningful bleeding reduction in these patients.
The IPO funds are expected to help finance a phase 3 study in Glanzmann thrombasthenia, as well as an ongoing phase 2 trial in another bleeding disorder called Factor VII deficiency.
Meanwhile, Hemab wants to push its monovalent antibody, HMB-002, through a phase 1/2 study for von Willebrand disease, another genetic disorder that impacts blood clotting.