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Thursday, Oct 6, 2022

The Government Is Back, But IPO Enthusiasm Has Yet to Return

The possibility of another government shutdown no longer looms over San Diego initial public offerings.

Legislation signed Feb. 15 kept the government open, removing the threat of a renewed pause on IPOs. The 35-day shutdown that began in late December sidelined U.S. Securities and Exchange Commission employees who green light IPOs.

Although the pall of a government shutdown lifted, it’s still unclear when three San Diego biotechs plan to go public: Cibus, Cirius Therapeutics and Poseida Therapeutics.

Only one regional biotech that’s filed in recent months has listed shares. Gossamer Bio debuted earlier this month with a $276 million offering.

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It was expected that 2019 would be a blockbuster year for IPOs. But the IPO market has gotten off to a slow start, given the government shutdown, and investors have grown choosier over IPOs with market sentiment declining, analysts say.

As of Feb. 18, an IPO calendar looking two weeks out didn’t include any of the three biotechs.

Poseida submitted preliminary IPO paperwork Jan. 4, made possible by an online system still being open despite the shutdown. The company declined a request to comment on the status of its filing, and when Poseida plans to go public.

Despite the government reopening in late January, analysts have noted that the SEC could be backed up for weeks reviewing filings.

Poseida — seeking $115 million through the IPO — employs CAR-T therapy, in which a patients T cells are altered to kill cancer cells.

On Jan. 11, Cirius Therapeutics readied an $86 million IPO. It declined a request to comment on when the company might list shares. Typically companies are reluctant to comment on their IPO filings.

Cirius’ lead drug candidate is targeting the liver condition NASH with fibrosis.

Cibus postponed its IPO slated for Feb. 14, citing “current market and technical conditions.” Asked to elaborate on the reasoning, the company did not respond.

The company’s gene editing technology selects for desirable crop traits. It’s vying for $100 million in funding.


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