In a turn of events unforeseen in the forecasts for the year, the first half of 2020 has become dominated by biotechs in the IPO market as market volatility has turned many IPO hopefuls away. The IPO market during the month of March had pretty much halted all operations as many companies delayed or even withdrew their IPOs in the midst of economic uncertainty. Despite this market slowdown, some biotechs have been successful in entering the market and even outperforming the broader market sell off.
One successful biotech pricing, despite the major market volatility last week, was Zentalis Pharmaceuticals (NASDAQ: ZNTL). The clinical-stage biopharmaceutical company priced its shares on the higher end at $18 per share. Zentalis offered 9.18 million shares of common stock, bringing their amount raise to $165.2 million with Morgan Stanley (NYSE: MS) and Jefferies (NYSE: JEF) as prominent underwriters. Despite the negative performance Wall Street demonstrated last week, Zentalis ended its first week up 29%.
Another company that was brave enough to price its IPO during the broad market sell-off was WiMi Hologram Cloud Inc. (NASDAQ: WIMI), although the company was not a biotech. WiMi is a Beijing-based virtual reality hologram recreational company that is prominent in its niche market. However, WiMi had priced its IPO at the lower end of $5.50 per share, thus raising a total of $26 million from 4.75 million offered shares. In addition, the holographic company did not have as much success as Zentalis in its first week, finishing up down 5% from its initial share price.
The week ahead poses to be another slow one with only one biotech daring to enter the uncertain market. However, Keros Therapeutics has all the makings of a successful biotech IPO. This Phase 1 biotech that focuses on novel treatments for hematological and musculoskeletal disorders plans to raise $92 million from 5 million offered shares through the pricing of its IPO this week. Keros set its share range to $14-$16 each and will price on the Nasdaq.
Keros Therapeutics has a few promising drug candidates in development. One currently named KER-050 is expected to begin a Phase 2 clinical trial for treatment of low blood cell count disorders. The company is also in development of other potential therapies for anemia and other blood related disorders.
