It’s easy to get lost in biotech land. The quantity of IPOs in the sector has come to the public markets at an unprecedented pace.
But there has been one biotech that’s never lacked “buzz” — and it’s long-awaited IPO is (finally) set for this week.
Moderna Inc. set terms for its IPO on November 28th and will seek $500m if they price the offering at the midpoint of the $22-$24 range.
The IPO is scheduled to debut on Friday, December 7th.
We first wrote about Moderna nearly three years ago when they were all the buzz at the JPM Healthcare conference. The reception since then has been to the tune of 10 (total funding rounds for a total of $1.8bn.
The company has used that cash to expand its facilities and expand its staff and reach.
But lets rewind, why is Moderna attracting so much attention?
Fierce Biotech states that …”it has 21 assets in its pipeline, spanning infectious diseases, immuno-oncology and rare diseases. Ten of these candidates are in clinical trials. The pipeline is led by the AstraZeneca-partnered AZD8601, a VEGF-A drug that’s in phase 2 for heart failure.”
The company describes itself: “mRNA transfers the instructions stored in DNA to make the proteins required in every living cell. Our approach is to use mRNA medicines to instruct a patient’s own cells to produce proteins that could prevent, treat, or cure disease. A schematic of the central role of mRNA in making proteins is shown in the figure below.”
Other mega pharmas that have partnered with Moderna are Alexion Therapeutics and Merck. As a private company, Bill & Melinda Gates are invested in Moderna.
One advantage Moderna has, as mentioned previously, is its deep pockets. As of September 30, 2018, they have raised over $2.6 billion in total funding from our strategic collaborators and investors, and have cash, cash equivalents, and investments of $1.2 billion. The trailing nine months ending September 30…the company burned $243.3m. This offering will only improve its financial standing.
The question facing IPO investors is valuation. Moderna has been a biotech “unicorn” (private valuation $1bn+) for some time. This offering values Moderna Inc. at $7.5bn… if the deal prices at the midpoint of the range. In 2017, there were “questions” surrounding the valuation of the company. At the time, Fidelity (a large shareholder), cut the valuation below where the company was touting itself causing a bit of tension.
As is the case with investing in biotech, patience can sometimes be rewarded. Biotech companies, especially recent IPOs, can trade with wild swings with little to no news.
So how does IPO Boutique help?
We provide pre-IPO channel checks with detailed color. Is the deal covered? Multiple-times oversubscribed? Where are the underwriters guiding pricing?
And most importantly, at what prices are large investors willing to “play the deal”.
These are the answers that paying clients of IPO Boutique receive on a daily basis. We cover every IPO with a cash raise greater than $25m on a daily basis. Our services extend into real-time alerts and ratings on secondary offerings.
We grade ourselves on a first day and first week basis. It is our opinion that if we can give our clients that “initial advantage”…our clients can choose to hold or trade the profitable position.
Try us out for a week or email JZell@IPOBoutique.Com any questions you may have about our service.
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