Codiak BioSciences, the first of several biotechs going public this week, got off to a tepid start Wednesday.
Shares of Codiak (Ticker: CDAK) opened at $14.10 and had yet to trade above the $15 initial public offering price by early afternoon, down 17% at $12.45. The Dow Jones Industrial Average was down 0.5%. Codiak’s offering is considered a broken deal because its shares are trading below their IPO price.
Biotechs have emerged as one of the busiest sectors of the IPO market. Codiak is the eighth biotech to go public this month. Several more companies are launching their deals this week, including Aligos Therapeutics, Kiromic Biopharma, and Praxis Precision Medicines.
Codiak collected $82.5 million late Tuesday after selling 5.5 million shares at $15 each, the midpoint of its $14 to $16 price range. Underwriters on the deal include Goldman Sachs, Evercore ISI and William Blair.
Codiak is developing exosome-based therapeutics to treat diseases. Exosomes help carry genetic information and proteins between cells. They are thought to help spread diseases like diabetes and cancer but scientists now think they can also help carry molecules to stop illnesses. There are no approved exosome-based therapeutics to date, the company’s prospectus said.
In September, Codiak began clinical trials for its leading candidates, exoSTING and exoIL-12, which aim to treat solid tumors. Codiak said it plans to use proceeds from the IPO to advance its drug candidates and for general corporate purposes.
Codiak isn’t profitable. The biotech reported $38.4 million in losses for the six months ended June 30 on $321,000 in revenue. This compares with roughly $35.7 million in losses a year earlier on $87,000 in revenue. The company has 101 full-time employees.
Arch Venture Partners will own 19.47% of the company after the IPO, while Flagship Pioneering will have 13.14% and Fidelity Investments will hold 10.41%. The Board of Regents of the University of Texas System, on behalf of the M.D. Anderson Cancer Center, will have nearly 5%.
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