San Diego Business Journal

For biotechs, what’s the path to an initial public offering like?

The CEOs of San Diego companies that took the IPO plunge weighed in on this question and others during a recent Biocom panel.

Dubbed “State of the Union: IPO Market in San Diego,” participating were Laura Shawver of Synthorx, Athena Countouriotis of Turning Point Therapeutics and Daniel Bradbury of Equillium.

Carin Canale-Theakston, the CEO of Canale Communications, moderated.

Synthorx’s IPO raised $151 million for a potential cancer drug derived from technology that expands the genetic alphabet, among other preclinical programs. The company went public in December, when market volatility took hold.

“There was also, because of the volatility, a certain paralysis by investors, like deer in headlights,” Shawver said.

She said banks brought up delaying, but the company felt confident in moving forward, and she added too many delays would have looked bad to investors.

If it had pushed pause, Synthorx may have gotten caught up in the government shutdown that froze the IPO market.

Shawver said filing for an IPO was about “conviction.”

“You have to have conviction about your drug and where it’s going,” Shawver said. “As a smaller, nimbler company, we can do it faster, better than the larger people that might acquire us.”

In April, cancer drug developer Turning Point Therapeutics hauled in $166.5 million during its public debut, an amount that surpassed original company expectations. On its first day the company’s stock closed at $28.90 a share, now trading at $36.62.

Countouriotis said Turning Point was eager to go public — and to do so she pushed the banks underwriting the deal to go faster.

“The lesson learned there was push when you can,” she said.

Equillium went from founding to a Nasdaq listing in only 16 months, bypassing the funding rounds that usually come ahead of an IPO. Its lead drug is targeting a tissue transplant disease.

Bradbury said investors were willing to put in more money for a public company.

“There was actually interest from these crossover funds, and they basically said, ‘Yes, we can put money into you as a private company, but can actually do a lot more if you’re public,’” he said.

Bradbury added running public companies suits him. Prior to Equillium, he was the CEO of diabetes drugmaker Amylin, which Bristol-Myers Squibb and then AstraZeneca bought about five years ago.

All the CEOs said the last year has been conducive to IPOs, marked by investors flush with cash and willing to invest in biotech. In turn, the cash injection allows these biotechs to build out their teams and advance programs through clinical trials.

But going public comes with trials and tribulations, like investors pulling out at the last minute or market sentiment — factors the CEOs touched on.

Asked if they anticipated 18 months ago being the CEOs of public companies, no one raised their hand.

In response, Canale-Theakston said, “Timing is everything.”