Editas Medicine Breaks U.S. IPO Drought
February 02 2016 - 07:30PM
Dow Jones News
A genome-editing company ended the U.S. IPO drought Tuesday.
Editas Medicine Inc., which is in the early stage of developing
a treatment to correct disease-causing genes in patients, raised
$94.4 million in its initial public offering late Tuesday,
according to a person familiar with the offering.
Editas is the first U.S. IPO since Dec. 17, when Chinese
peer-to-peer lender Yirendai Ltd. raised $75 million in its
stock-market debut, according to Dealogic.
Tumultuous trading across global stocks has kept many companies
seeking to raise money in public offerings at bay in recent weeks,
analysts and investors said. So far this year, the S&P 500 has
fallen nearly 7%, and biotech stocks are down about 23%.
Zero companies went public in January, the first time there were
no IPOs in a month since September 2011.
"Even for the highest-quality companies, there is less demand
than there was a few months ago for IPOs," said Ziad Bakri, a
health-care analyst at mutual-fund firm T. Rowe Price. "It's very
tough."
Tuesday's market didn't help the situation, analysts said. The
S&P 500 fell 1.9% and the Nasdaq Biotechnology Index dropped
nearly 3%.
Editas sold 5.9 million shares at $16 apiece, the person
familiar with the matter said. The company had planned to raise
more than $100 million by selling 5.9 million shares between $16
and $18 a share, according to regulatory filings.
Immuno-oncology drug developer BeiGene Ltd. also is set to price
its IPO late Tuesday, according to people familiar with the
offering. It planned to raise about $127 million by selling 5.5
million American depositary shares at $22 to $24 apiece, according
to regulatory filings.
Despite the tough market environment, some people familiar with
the offerings said they expected the BeiGene and Editas deals to be
helped by current investors buying more shares in the IPOs. Two
existing BeiGene shareholders, Hillhouse BGN Holdings Ltd and Baker
Bros. Advisors had indicated an interest in purchasing 50% of the
shares in the offering, according to regulatory filings.
Current investors in Editas include Deerfield Management
Company, Fidelity Investments and T. Rowe Price, according to
regulatory filings.
Since the start of 2014, nearly three-quarters of biotech IPOs
have had pre-IPO investors buy additional shares in the IPO deal,
and the average buying for such existing investors for all biotech
IPOs has been 21%, according to Renaissance Capital, which manages
IPO-focused exchange-traded funds. For nonbiotech IPOs, there have
been pre-IPO buyers for just 13% of these offerings, with the
average stake in the IPO for such buyers totaling 3%, Renaissance
Capital data show.
Editas Medicine plans to use the money raised in its IPOs for
preclinical studies and clinical trials, among other things,
according to the company's regulatory filings.
Editas is set to begin trading Wednesday on the Nasdaq Stock
Market under the symbol "EDIT." The deal was led by Morgan Stanley
and J.P. Morgan.
Write to Corrie Driebusch at corrie.driebusch@wsj.com
(END) Dow Jones Newswires
February 02, 2016 19:15 ET (00:15 GMT)
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