June's flood of biotech IPOs continues with these 4 deals

June is seeing a wave of biotech IPOs. Five priced last week, and four more are on the IPO calendar for this week.  

Recent biotech IPOs have mostly underperformed, though 2 are up +100%
Biotechs have driven 2019 healthcare IPOs with 25 of the 32 offerings. The biotechs averaged a first-day return of 9.0%, but they've then traded down to a 5.9% return. Top performers are cancer biotech Turning Point (TPTX; +136%) and Alzheimer's biotech Cortexyme (CRTX; +111%). Last year's biotech IPOs have underperformed, with an average return of -5.8% from IPO. IPO investors aren't buying everything, however; last week's skin disease biotech Dermavant (DRMT) postponed its offering.

Many biotechs are early stage
Three of June's biotechs 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), one has candidates in Phase 3 (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.

The content below was available to IPO Pro subscribers last week.

Adaptive Biotechnologies (ADPT) has developed an advanced genetic sequencing platform focused on the immune system, immunoSEQ, and a commercial diagnostic test, clonoSEQ. It booked $59 million in trailing 12-month revenue for its products and research services. Close peer Personalis (PSNL) IPO'd last week, and finished Friday with a 78% gain. Having raised over $500 million from hedge funds Viking Global, Matrix Capital and others, Adaptive now plans to use IPO cash to expand its clonoSEQ diagnostic capabilities, work with Microsoft's machine-learning technologies to develop a new diagnostic test, and develop various T cell receptor drug candidates for cancer alongside Genentech (received $300mm upfront; up to $1.8B in milestones).
Bookrunners: Goldman Sachs, J.P. Morgan, BofA Merrill Lynch, Cowen, Guggenheim.
Prospectus Link: IPO Pro only
Roadshow Link: IPO Pro only

BridgeBio Pharma (BBIO) has a large pipeline of 16 development programs, including 10 focused on diseases caused by a defective gene, four targeting cancer, and two gene therapy candidates. Backed by KKR and Viking Global, the company has raised $482 million privately. Last year, it spun out its neurodegenerative disease subsidiary Eidos Therapeutics (EIDX); Eidos has returned 93% from its June 2018 offer price.
Bookrunners: J.P. Morgan, Goldman Sachs, Jefferies, SVB Leerink, KKR, Piper Jaffray, Mizuho Securities, BMO, Raymond James.
Prospectus Link: IPO Pro only
Roadshow Link: IPO Pro only

Morphic Holding (MORF) is in preclinical studies for a range of oral integrin inhibitors, a class of injectable drug with multiple blockbusters. Backed by Omega Funds and based on the work of co-founder and immunology pioneer Timothy Springer, Morphic is targeting inflammatory bowel disease in a wholly-owned program and partnering with AbbVie to target idiopathic pulmonary fibrosis. It plans to file its first IND by the end of the year. Insiders are buying up to 40% of the IPO.
Bookrunners: Jefferies, Cowen, BMO, Wells Fargo.
Prospectus Link: IPO Pro only
Roadshow Link: IPO Pro only

Karuna Therapeutics (KRTX) is developing sole candidate KarXT for a variety of symptoms related to CNS disorders; lead program is in a Phase 2 trial for psychosis in patients with schizophrenia. The company is led by Steve Paul, the former CEO of Voyager Therapeutics (VYGR) who also helped develop Cymbalta and Zyprexa at Eli Lilly. With backing from PureTech Health and ARCH Ventures, Karuna is in-licensing a former Lilly candidate and combining it with trospium chloride in the hope that the latter will improve the safety of the former, which originally caused Lilly to drop the drug despite some promising results. Insiders have indicated on 43% of the deal.
Bookrunners: Goldman Sachs, Citi, Wells Fargo.
Prospectus Link: IPO Pro only
Roadshow Link: IPO Pro only


Stoke Therapeutics (STOK, preclinical biotech seeded by Apple Tree Partners, is developing RNA-targeted therapies for rare genetic diseases. Founded in 2014, Stoke raised $131 million privately, and priced an upsized IPO above the range to raise $142 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

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 priced at the high end to raise $92 million on the IPO. 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

Atreca (BCEL), a preclinical biotech that is developing immunotherapies for solid tumors, raised $125 million in its IPO, adding to the $219 million it 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

Prevail Therapeutics (PRVL) is developing disease-modifying gene therapies for neurodegenerative diseases. Backed by OrbiMed, it has raised $130 million privately and added $125 million on its IPO last week. 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