Jounce Therapeutics has gone ahead of its projections and raised roughly $102 million in an IPO, continuing an early, yet successful trend for biotechs trying to go public in 2017.
The Cambridge, MA, company sold close to 6,365,000 shares at $16 apiece, almost 1 million more shares than it proposed to sell a few weeks ago. Jounce also priced above the $13 to $15 per share range it had set. It will start trading on the Nasdaq this morning under the symbol “JNCE.”
The IPO is a big haul for Jounce, reminiscent of biotech’s bull run from 2013 to 2015, when several companies went public with big valuations despite the fact that, like Jounce, they had yet to accrue any human clinical data. Jounce is in the midst of its first trial for a cancer immunotherapy drug called JTX-2011, a study that should produce data next year. The company does have a broad partnership with Celgene (NASDAQ: CELG), however, and the big Summit, NJ, drugmaker is among its top shareholders.
Jounce follows two other biotechs this week—Swiss firm ObsEva (NASDAQ: OBSV) and San Diego-based AnaptysBio (NASDAQ: ANAB)—that each priced IPOs within their projected ranges. Like Jounce, Anaptys upsized its offering. (Another Cambridge firm, Visterra, was scheduled to price on Thursday night but has yet to make an announcement.)
These companies look to improve on the performance of the 2016 IPO class, which wasn’t great overall. Many members of that group broke below the price of their offerings, and the worst performers among last year’s IPO class were mainly small biotechs, according to a 2016 review from IPO research firm Renaisssance Capital. Anaptys climbed 17 percent in its first trading day, while ObsEva fell more than 22 percent in its debut.
Yet the silver lining for biotech in 2016 was that it was still one of the most active sectors for IPOs—in part because insiders bought shares to complete offerings. Renaissance’s report, for instance, showed there were 105 IPOs in 2016 across all industries, down 38 percent from 2015 and the lowest total since 2009. Yet healthcare remained the most active sector, driven by 40 total IPOs—29 of which were biotechs, according to the report. In that report, Renaissance expected biotechs “may need to follow the same playbook” and rely on insider participation in 2017.
So far, they have. According to SEC filings, insiders indicated plans to buy $30 million of ObsEva’s IPO; $30 million of AnaptysBio’s IPO; $26.4 million of Visterra’s IPO; and $10 million of Jounce’s IPO. These agreements aren’t binding, but they usually end up being accurate.