2016 sees its first US IPOs as biotechs Editas, BeiGene enter a turbulent market
- The U.S. saw a full month of 2016 pass by without an IPO. But that changed on February 2 when genome editing biotech Editas and immuno-oncology upstart BeiGene both listed on the NASDAQ on Tuesday.
- Editas raised $94.4 million in its IPO while BeiGene raised about $158 million, according to the Wall Street Journal.
- Editas is a Cambridge, MA-based genome editing firm focusing on platforms which use CRISPR-Cas9 technology and has attracted investors such as Bill Gates. BeiGene is a Chinese biopharma whose lead pipeline candidates are checkpoint inhibitors and monoclonal antibodies being tested for a variety of cancers, including lymphomas.
Markets got off to a shaky start in 2016 as a combination of fears about the strength of economies such as China's, tumbling oil prices, and other factors sent broader indices falling (and biotech along with it). So it may not be too surprising that biotechs have taken a wait-and-see approach in 2016 and held off on IPOs until more than a month into the year.
Editas and BeiGene are likely buoyed by the support of a strong cast of financial backers. The gene editing firm has attracted interest and cash from Google Ventures, Deerfield Management, Fidelity, T. Rowe Price, and billionaire Bill Gates, while BeiGene has been bolstered by major investments from Hillhouse Holdings and Baker Bros. Advisors.
Now, the questions is how the companies will be using the cash. Editas, a very early-stage firm, has previously stated that it will use its IPO hoard to fund preclinical studies and some clinical trials. BeiGene will likely funnel the money to pay for continuing R&D on its investigational candidates. The firm harbors ambitions of becoming a major Chinese drugmaker which creates its own next-gen therapies rather than relying on existing global pharma firms.