Two biotechnology companies, Apogee Therapeutics and Sagimet Biosciences, priced initial public offerings Thursday evening — green shoots amid a prolonged industry downturn that’s all but halted IPOs by drugmakers.
Apogee, a company developing antibody drugs for inflammatory diseases, raised $300 million in gross proceeds, confirming the sale of more than 17.6 million shares at $17 apiece. It began trading on the Nasdaq stock exchange under the ticker symbol “APGE.”
Sagimet, which is testing a medicine to treat nonalcoholic steatohepatitis, priced an $85 million IPO, selling about 5.3 million shares for $16 each. It will trade under the ticker symbol “SGMT,” according to the company.
The two join 10 other drugmakers that have priced offerings so far in 2023. Apogee’s raise was the second largest for a clinical-stage biotech this year, after Acelyrin’s $540 million IPO in May.
Apogee emerged from stealth just seven months ago, spinning out from Waltham, Massachusetts-based Paragon Therapeutics. By that point, it had raised $169 million in private financing to advance its lead candidate into clinical testing this year.
Sagimet, based in San Mateo, California, was founded in 2007 and was previously known as 3-V Biosciences.
It is running two clinical trials for its lead candidate, TVB-2640, including a Phase 2 study for non-alcoholic steatohepatitis and Phase 3 trial for glioblastoma with Ascletis.
Industry watchers have predicted the second half of the year could be a busier time for young drugmakers looking to raise IPOs. This year’s total of 12 IPOs to date is a sharp drop from the highs of 2020 and 2021, when 183 biotech companies made their Wall Street debuts and raised nearly $30 billion combined.
Both Apogee and Sagimet upsized their IPOs, offering more shares than originally planned, suggesting higher-than-expected demand.
Biotechs in clinical trials are more likely to successfully price an IPO, said Jordan Saxe, head of healthcare listings at the Nasdaq stock exchange, in a recent interview with BioPharma Dive.
As a preclinical company, Apogee appeared to buck that trend with its $300 million offering, but it is backed by well-known investors such as Fairmount Funds and Venrock, and led by former AbbVie and Novartis executives.
A third biotech, 60 Degree Pharmaceuticals, also priced a $7.5 million offering this week.