High Profile Biotech, Editas Medicine, Set to Test IPO Market

The biotech barometer may be here.

Editas Medicine (Nasdaq: EDIT),  a leading genome editing company dedicated to treating patients with genetically defined diseases by correcting their disease-causing genes, updated terms for its IPO and has scheduled a February 3rd trade date.

The interest in this deal is currently very large for a few reasons.

For one, the backers of Editas Medicine are held among the highest regard. Google, Bill Gates, T Rowe Price and Fidelity are just a few of the notable investors that have already bought into the deal. Another high profile biotech company who went public within the last 14 months, Juno Therapeutics (Nasdaq:JUNO), is in a collaboration with $EDIT that could be worth up to $745 million. And in early August 2015, another $120 million was poured into the company in a private offering.

You didn’t hear about Editas Medicine at the JP Morgan Healthcare Conference for good reason. Hindsight indicated that $EDIT was anticipating going public in the first quarter of the year and did not want to violate its ‘quiet period’.

So, why the buzz?

The company’s CRSPR-Cas9 (clustered, regularly interspaced short palindromic repeats)/Cas9 (CRISPR associated protein 9) platform seeks to identify and repair faulty DNA strands that cause disease, holding the potential to completely eradicate certain types of genetic disease.

Editas is still in pre-clinical development of its gene-editing platform with its first compound (LCA10), a treatment for blindness, not expected to begin human trials until 2017.

“In last year’s biotech market, this deal would be a home-run,” senior managing partner at IPOBoutique, Scott Sweet, said.

Instead, the deal is being courted in the midst of one of the most volatile periods in U.S. stock market history.

“A positive outcome could certainly fire up the biotech IPO market,” Sweet said.

It will be the first deal of the year for two major investment banks, Morgan Stanley and JP Morgan, who are the joint book-runners on Editas Medicine. The deal is currently in the midst of a seven-day roadshow where they have filed to price 5.9m shares at a $16-$18 range. Currently, the demand for this deal is trending toward the high end of that prevailing range which will value the biotech near the $650m mark.

Expectations for Editas Medicine are about as high as the volatility in the market. The outcome of 2016’s first high-profile biotech will be on the radar of IPO and healthcare investors next week.