June is getting a flood of biotech IPOs with these 9 deals on the calendar

A wave of biotechs are preparing to go public in June, with five on the IPO calendar for this week and four more scheduled for the week of June 24. Two others could soon launch June/July IPOs as well.

Recent biotech IPOs have mostly underperformed, though 2 are up +100%
Biotechs have driven 2019 healthcare IPOs with 21 of the 27 offerings. The biotechs averaged a first-day return of 8.7%, but they've then traded down to a 6.2% return. Top performers are cancer biotech Turning Point (TPTX; +137%) and Alzheimer's biotech Cortexyme (CRTX; +125%). Last year's biotech IPOs have underperformed, with an average return of -6.8% from IPO.

Many upcoming biotechs are early stage
Three deals on the calendar are preclinical (STOK, BCEL, MORF) and one has only filed an IND (PRVL). One has completed Phase 1 (AKRO), one is in Phase 2 (KRTX), two have candidates in Phase 3 (DRMT, BBIO), and one has a commercial diagnostic product with a preclinical drug program (ADPT).

Several are very large
Two upcoming IPOs, BridgeBio (BBIO) and Adaptive Biotechnologies (ADPT), are targeting IPO valuations of more than $1.5 billion, and a third, Genmab (GMAB), has not yet set terms but trades in Europe with a $10+ billion market cap.

Stoke Therapeutics (STOK, preclinical biotech seeded by Apple Tree Partners, is developing RNA-targeted therapies for rare genetic diseases. Founded in 2014, Stoke has raised $131 million to date, and is looking to raise $101 million on the IPO. Lead product candidate STK-001 is a potentially disease-modifying treatment for Dravet syndrome, a severe and progressive genetic epilepsy. It is currently in preclinical studies, with hopes that Stoke can initiate a Phase 1/2 clinical trial in the first half of 2020.
Bookrunners: J.P. Morgan, Cowen, Credit Suisse.
Prospectus Link: IPO Pro only
Roadshow Link: IPO Pro only

Akero Therapeutics (AKRO) is a clinical-stage biotech led by the former CMO of Gilead Sciences developing therapies for metabolic diseases, namely nonalcoholic steatohepatitis (NASH), a potentially-fatal liver condition. Apple Tree Partners is also the lead investor of Akero, joined by Atlas and venBio. It has raised $90 million from private investors and is targeting $75 million on the IPO (40% from insiders). Lead NASH candidate AKR-001 is an analog of fibroblast growth factor 21 (FGF21), which regulates the metabolism of lipids, carbs, and proteins; it is now is preparing to enter Phase 2 clinical trials.
Bookrunners: J.P. Morgan, Jefferies, Evercore ISI.
Prospectus Link: IPO Pro only
Roadshow Link: IPO Pro only

Atreca (BCEL), a preclinical biotech that is developing immunotherapies for solid tumors, is expected to raise $125 million in its upcoming IPO (48% from insiders), adding to the $219 million is has raised privately. Backed by Baker Brothers Advisors, Wellington, and the Bill & Melinda Gates Foundation, Atreca is led by CEO John Orwin, the former CEO of Relypsa (acquired in 2017 for $1.5 billion). Atreca’s lead product candidate is a monoclonal antibody that has reacted in vitro with multiple types of solid tumors and demonstrated anti-tumor activity in mouse models. The company hopes to initiate a Phase 1 clinical trial in patients in early 2020.
Bookrunners: Cowen, Evercore ISI, Stifel.
Prospectus Link: IPO Pro only
Roadshow Link: IPO Pro only

Dermavant Sciences (DRMT) is a clinical-stage biotech developing in-licensed therapies for dermatological diseases. It is the latest drug developer to be spun out of Roivant Sciences (buying 35% of the IPO) with an acquired drug candidate packaged into an IPO. Previous "vant" IPOs include Axovant (AXGT), Myovant (MYOV), and Urovant (UROV), all of which have underperformed. Led by the former President of Swiss pharmaceutical Galderma, Dermavant is developing a topical cream targeting psoriasis and atopic dermatitis which, as of May 2019, has been used in two Phase 3 clinical trials.
Bookrunners: Jefferies, SVB Leerink, Guggenheim Securities.
Prospectus Link: IPO Pro only
Roadshow Link: IPO Pro only

Prevail Therapeutics (PRVL) is developing disease-modifying gene therapies for neurodegenerative diseases. Backed by OrbiMed, it has raised $130 million privately and is looking to raise $125 million with its upcoming IPO. Prevail’s lead product candidate is an AAV9 vector delivering the GBA1 gene for Parkinson’s disease with the GBA1 mutation (PD-GBA) and neuronopathic Gaucher disease. The FDA recently approved trial initiation for its PD-GBA program, which will likely enter Phase 1/2 clinical trials by the end of the year.
Bookrunners: Morgan Stanley, BofA Merrill Lynch, Cowen.
Prospectus Link: IPO Pro only
Roadshow Link: IPO Pro only

In addition to the biotech names, Personalis (PSNL), which provides genome sequencing tests used in drug development, is also scheduled to price in the week ahead. Its services are comparable to upcoming IPO Adaptive Biotechnologies, though Personalis has no drug development program.

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Four Biotechs on the Calendar for the Week of June 24
Four biotechs are scheduled to raise a combined $570 million in the following week. Adaptive and BridgeBio are each valued at more than $1.5 billion, and expect to have over $500 million in cash post-IPO.

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