The IPO Buzz: Acrivon Therapeutics (ACRV) Prices IPO at $12.50 – Below Range

Acrivon Therapeutics (ACRV) priced its IPO at $12.50 – far below its initial price range of $16.00 to $18.00 – and sold 7.55 million shares (7,550,000 shares) on Monday night (Nov. 14, 2022) to raise $94.38 million. That’s a much smaller deal than the cancer biotech had originally planned. Acrivon Therapeutics initially expected to raise $100.3 million last week – 5.9 million shares at $16 to $18. (This column, initially published Monday night, Nov. 14, 2022, was updated early Tuesday morning, Nov. 15, with more details of the deal.) 

Acrivon Therapeutics’ stock opened at $13.35 – up 85 cents or 6.8 percent from its $12.50 IPO price – in its NASDAQ debut on Tuesday (Nov. 15, 2022). Volume was 104,080 shares, NASDAQ records showed. Acrivon Therapeutics’ stock closed at $16.64 – up $4.14 or 33.12 percent from its IPO price on volume of 528,026 shares.

Jefferies, Cowen and Piper Sandler were the joint book-runners of Acrivon’s revised IPO.

Morgan Stanley – initially in the lead left position among the book-runners – did not participate in the pricing, according to the cover of the Free Writing Prospectus dated Nov. 14, 2022.

The deal was delayed last week. It was initially scheduled for pricing on Wednesday night, Nov. 9, to trade Thursday, Nov. 10. Wednesday turned out to be an ugly day in the overall stock market. The IPO’s pricing was pushed back a night for a Veterans Day debut on the NASDAQ on Friday, Nov. 11, 2022. A Thursday night pricing would have followed the stock market’s huge rally on Nov. 10 – with the Dow up more than 1,000 points on the cooler-than-expected October CPI data.

But the deal remained on hold. That led to some speculation that maybe Acrivon and its bankers wanted to wait until after Veterans Day, when banks were closed and many market participants were out.

In addition to the shares sold in the initial public offering, Acrivon Therapeutics announced a concurrent sale of 400,000 shares of common stock at the IPO price in a private placement to Chione Limited, one of Acrivon’s principal stockholders. The private placement raised another $5.0 million for Acrivon – bringing the combined proceeds from the IPO and the private placement to $99.38 million. That’s about $1 million less than the $100.3 million in estimated proceeds under the initial terms, if the deal had been priced at the $17.00 mid-point of its original range.

The Free Writing Prospectus, dated Nov. 14, 2022, said that Chione Limited, an existing stockholder with 5 percent or more of the outstanding stock, had indicated interest in buying up to $5.0 million of stock at the IPO price in a private placement concurrent with the offering. Certain existing stockholders indicated interest in buying in aggregate up to 88 percent of the stock in the IPO, according to the Free Writing Prospectus.

Acrivon Therapeutics, based in Watertown, Massachusetts, is a typical biotech: It has not generated any revenues yet from its products. It’s not profitable. Acrivon Therapeutics reported a net loss of $19.7 million on no revenues for the 12 months that ended June 30, 2022, according to the prospectus.

Acrivon’s leading cancer drug candidate, ACR-368, is being developed under an exclusive worldwide license agreement with Eli Lilly, which shelved the drug in 2019 after lackluster results. Acrivon has a partnership agreement with Akoya Pharmaceuticals to develop and commercialize its proteomics (protein-based) OncoSignature test to determine which cancer patients are most likely to respond well to ACR-368. It’s enrolling patients with platinum-resistant ovarian, endometrial and bladder cancer in Phase 2 clinical trials of ACR-368, the prospectus says.

In addition to Chione Limited, Acrivon Therapeutics’ principal shareholders include R.A. Capital, Wellington Biomedical Innovation Master Investors (Cayman) I L.P., Citadel Multi-Strategy Equities Master Fund Ltd., Perceptive Life Sciences Master Fund, Ltd. and Sands Capital Life Sciences Pulse Fund II, L.P.

“Our ACR-368 OncoSignature test, which has not yet obtained regulatory approval, has been extensively evaluated in pre-clinical studies, including in two separate, blinded, prospectively-designed studies on pre-treatment tumor biopsies collected from patients with ovarian cancer treated with ACR-368 in past Phase 2 clinical trials conducted by Eli Lilly and Company, or Lilly, and at the National Cancer Institute, or NCI, demonstrating robust enrichment of responders through our method,” the prospectus says.

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Disclosure: Nobody on the staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The staff does not issue advice, recommendations or opinions.

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