As Alder Biopharmaceuticals can attest to today, the biotech IPO train has hit the skids.
The Bothell, WA-based company has priced its IPO at $10 per share, well below its projected $13 to $15 per share range, according to IPO research firm Renaissance Capital. Alder upsized its offering to 8 million shares from 7.2 million to take itself public, good for an $80 million haul before discounts due to underwriters—but far short of the $115 million it planned to raise when it first filed its S-1 in March. Alder will begin trading today on the Nasdaq today under the ticker symbol “ALDR.”
Credit Suisse Securities (USA), Leerink Partners, Wells Fargo Securities, and Sanford C. Bernstein are underwriting the IPO. The company’s largest shareholders are Sevin Rosen Funds (23.7 percent stake before the offering), Ventures West 8 (14.7 percent), Novo A/S (12.1 percent), HIG Venture Partners (11.8 percent), Delphi Ventures (11.4 percent), and TPG Biotechnology Partners (11.4 percent). Alder has raised about $111.4 million since its inception in 2004.
Alder has found the market unfriendly despite seeing its drugs make some positive strides in clinical trials over the past year. A rheumatoid arthritis drug it’s been developing with New York-based Bristol-Myers Squibb, clazakizumab, succeeded in a Phase 2b trial in October. That drug is part of a $1.35 billion partnership with Bristol-Myers, from which Alder has only bagged about $103.5 million to date. Alder presented positive results from a trial of a second drug its developing, an antibody drug for migraines, at a medical meeting last week. Alder holds full rights to that drug, which is known as ALD403. (Bristol-Myers owns commercial rights to clazakizumab.)
Alder isn’t the only biotech to have trouble pricing of late. Cerulean Pharma and Aldeyra Therapeutics, for instance, both sold shares for less than they’d hoped over the past month. That’s a far cry from the booming valuations given to biotech IPO last year, or even in early 2014. Dicerna Pharmaceuticals (NASDAQ: DRNA) priced above its range in January and tripled in value on its first trading day.
Alder was formed by executives of Celltech R&D, based around a yeast-based antibody production system (MabXpress) that is supposed to be cheaper than other biotech drugmaking platforms, while enabling the company to hit molecular targets that the industry has found historically tough to attack with antibodies. The company had about $23.2 million in cash on hand as of Dec. 31.