The coronavirus pandemic has ground businesses across the country to a halt.
But the best biotech IPOs and firms have been stomping on the gas pedal. And those who took the leap of faith and invested in them early have been rewarded handsomely.
In June alone, there were no less than 14 IPOs in the sector. And a good chunk of them are outperforming the broader markets.
When Pliant Therapeutics (Nasdaq: PLRX) IPO’d, it fetched $16 per share. Share prices have since jumped close to 70% in less than a month of trading.
Forma Therapeutics (Nasdaq: FMTX), which develops therapies for rare diseases and cancers, priced its initial public offering of 13.8 million shares at $20 a pop. Those lucky enough to get in early have seen their investment go up almost 80% in a matter of weeks.
And that was despite a long list of risks the Forma Therapeutics IPO filing listed.
Then, of course, there is the aptly named Legend Biotech (Nasdaq: LEGN). Legend just had the largest U.S. biotech IPO of 2020. And what it’s doing in the lab is just as impressive.
The company’s early trial of a cell therapy to treat multiple myeloma has been remarkable. All 29 patients treated in the trial responded positively.
But even more impressive is the fact that 25 of the 29 had no trace of cancer in less than a year’s time after beginning the treatment.
Legend priced its shares at $23 for its IPO at the beginning of June. And they’ve since seen a 60% spike in price.
That’s pretty much been par for the course in the biotech sector.
The 36 biotechs that IPO’d in the first half of the year are collectively averaging a 63% return for investors.
And the good news is there’s a lot more where that came from.
The Best Biotech IPOs for 2020
So far this year, the spoils have gone to those who acted the fastest.
That’s because many of these companies had breakthrough treatments that served as catalysts for a quick rise in value.
When a company launches a successful IPO on the back of a breakthrough treatment, it triggers a lot of volume. And that pushes prices up fast.
For example, going back to Legend, its stock price jumped 46.6% in the first day of trading due in no small part due to positive results in the clinical trial of its myeloma treatment.
Pliant Therapeutics’ day-one prices shot up more than 23%. The catalyst for this spike came from Novartis agreeing to pony up $80 million to license the company’s preclinical nonalcoholic steatohepatitis (NASH) treatment.
And the company had already announced in a securities filing that it had earmarked $90 million of fresh cash flow for its idiopathic pulmonary fibrosis and primary sclerosing cholangitis therapies. These are all good signs for investors.
And Forma’s share price went up a whopping 64.4% after a single day of trading. At least part of that surge came from the news that Forma would be using newfound cash from its IPO to fund clinical trials.
The big two for this biotech firm are its FT-4202 product to treat sickle cell disease and FT-7051, which limits androgen receptor activity and hinders prostate cancer cell growth.
All of this makes it increasingly clear that folks need to move fast to capitalize off a biotech IPO.
With that, here are the three we’ll be keeping a close eye on…
Three Biotechs to Watch
Relay Therapeutics, out of Cambridge, Massachusetts, just filed the necessary paperwork for its IPO. While there’s no official date set yet, the company plans to use the ticker symbol RLAY.
Relay has already raised $520 million in three rounds of private funding.
And additional funds raised from its IPO will be directed to Phase 2/3 clinical trials of its breakout drug candidate RLY-1971, which inhibits SHP2 protein in tumors. And it has another candidate in RLY-4008, which is designed to inhibit fibroblast growth factor receptor 2. This receptor has been shown to lead to various cancers.
All of this makes Relay Therapeutics a candidate for fast, explosive growth. It’s a biotech IPO worth tracking.
The second biotech firm we’ll be watching is Alx Oncology Holdings, which plans to be listed on the Nasdaq under the ticker ALXO.
The company is looking to push its ALX148 anti-cancer therapy into Phase 2 trials by the end of the year. And it’s worth noting that ALX148 is believed to have a better risk-benefit profile than many of its rivals.
If the company can convince investors that this is the case, share prices of Alx could be poised to move up quickly once it officially IPOs.
And last is the biotech firm Pandion Therapeutics, which is looking to IPO under the ticker symbol PAND.
This outfit got our attention due to the rapid development of its cutting-edge efforts to treat autoimmune disorders. And the company is moving treatments rapidly through clinical trials.
Pandion’s leading therapy candidate, PT101, is poised to be a much needed breakthrough in preventing the immune system from attacking the host’s tissues and organs.
Typical treatments for autoimmune conditions have relied on immunosuppression, which can have undesirable side effects, like an increased risk of cancer and other infections.
But Pandion’s treatment takes a very different approach.
PT101 is designed to increase the level of regulatory T cells that moderate the immune system and fight off autoimmune diseases without inducing inflammation… a key component that has been lacking in treatments to this point.
There’s been a lot of action with biotech IPOs of late. That’s looking like it will continue for the near future.
And companies with promising therapies racing through clinical trials are poised to make a lot of money… which is good news for their treatments and for investors.
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