Moderna mulls upsizing largest biotech IPO since 2016

Marco Green
December 9, 2018

Moderna Inc will sell around US$604.3 million in shares in its initial public offering (IPO), the biotech company said on Thursday, braving stock market jitters to sell more stock than originally planned.

"Given the unique nature of these IPOs involving crossover investors, their strong returns, the rapid advances in science due to "Big Data" innovations and the expectation of big Pharma scooping up promising young companies, we expect the Pharma Life Sciences sector to keep leading the broader IPO market in 2019", said David Ethridge, US IPO services leader at PwC.

The amount raised eclipses the previous $324 million Nasdaq record set by CAR-T player Allogene in October after it priced at the top of the expected range, as well as Innovent Biologics' Hong Kong listing that raised $421 million.

The next test will be how Moderna's shares trade.

Cambridge, Massachusetts-based Moderna, one of the most highly valued startups in health care, is trying to develop a new kind of drug and vaccine using the body's own cellular machinery to protect against or even fight off disease.

Moderna is developing medical treatments based on messenger RNA, and the company is still in the early days of human trials for its treatments. Moderna believes it can use mRNA to spur the body to produce its own therapeutic proteins. As of September 30, it had raised $1.8 billion in equity and $800 million through partnerships with companies like AstraZeneca, Merck & Co., Vertex, Alexion and others, according to the S-1 filing.

Morgan Stanley, Goldman Sachs and J.P. Morgan were the joint lead bookrunners on the deal.

The biotech's operating expenses in 2017 topped $475 million.

At least 10 of those are already in clinical trials, now led by AstraZeneca-partnered AZD8601, a VEGF-A drug which is in phase 2 for heart failure, and other programs including phase 1 vaccines for cancer and viral infections such as chikungunya and Zika, as well as preclinical candidates for rare diseases including Fabry disease and phenylketonuria. Also in Phase I development are a mRNA-4157, a PCV-targeting cancer vaccine for solid tumors partnered with Merck & Co., and an OX40L-targeting drug, mRNA-2416, for which Moderna retains global rights for development in solid tumors and lymphoma.

"We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future", the company said in its securities filing. While the price fell at the midpoint of a previously-announced range of between $22 and $24 a share, the company sold 4,536,862 more shares than previously projected.

Other reports by Click Lancashire

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