The IPO Buzz: Biotech IPO Springs into Action

AN2 Therapeutics (ANTX), a clinical biotech, jumped into the first trading day of spring 2022 by launching its IPO early Monday morning (March 21) for pricing on Thursday night. Shares of AN2 Therapeutics popped on Friday (March 25), opening at $16.85 – up 12.3 percent from their IPO price at $15 – on their first day of trading on the NASDAQ. This deal – the first IPO this month from a team of big banks – was upsized at pricing Thursday night (March 24) to 4.6 million shares (vs. 4 million shares in the prospectus). The deal raised $69 million. AN2 Therapeutics’ IPO price at $15 was the mid-point of its $14-to-$16 range. Cowen, SVB Leerink and Evercore ISI were the joint book-runners, while Oppenheimer & Co. was the co-manager of this IPO. (Editor’s Note: This column, published Monday, was updated twice on Friday morning (March 25, 2022) – once with AN2 Therapeutics’ pricing news and again with the opening trade.)

Chronic non-TB mycobacterial (NTM) lung disease is the target of AN2 Therapeutics and its leading drug product candidate, epetraborole. The drug is a once daily oral treatment that uses boron chemistry to inhibit an essential and universal step in bacterial protein synthesis, the prospectus says. About 200,000 patients in the U.S. have chronic NTM, a rare disease that is hard to treat.  People with COPD and cystic fibrosis are especially vulnerable to chronic NTM.

Shares of AN2 Therapeutics closed at $15.40, up 2.7 percent from its IPO price.

AN2 Therapeutics’ IPO attracted a lot of interest from biotech players – and from outside that realm. 

“The biotech sector has been hit so hard that it could be due for a comeback,” a veteran IPO trader says.

An investor survey by Endpoints News shows that there’s “ample opportunity for a rebound,” with 66 percent saying they believe that biotech will outperform the broader market in 2022. (Please click the hyperlink for the Endpoints News story published Monday, March 21, 2022, at 6 a.m. EDT.)

The FDA recently approved AN2 Therapeutics’ IND (Investigational New Drug) application to begin a Phase 1 renal impairment study of epetraborole, AN2 Therapeutics says in the prospectus. The company expects to begin a Phase 2/3 pivotal clinical trial in the first half of 2022.

On Friday at midday, stocks were mixed. A week ago, stocks staged a huge rally on Friday (March 18, 2022), with the three major U.S. stock indexes marking their best week since early November 2020. 

1 SPAC Priced & An Israeli IPO On Tap

The rest of this week’s IPO Calendar consisted of two SPACs, or blank-check companies, and one tiny IPO from an Israeli tech start-up. This line-up – a few SPAC IPOs and a sprinkling of very small-cap IPOs – is on par with the IPO Calendar of the past few weeks as investors have weighed the impact of Russia’s war on Ukraine and the Fed’s shift into a cycle of raising interest rates.

RF Acquisition Corp. (RFACU proposed), a Singapore-based SPAC focused on Southeast Asia’s new economy, priced its IPO on Wednesday night (March 23). The SPAC’s stock and warrants will start trading Thursday (March 24) on the NASDAQ. This IPO consisted of 10 million units at $10 each. RF Acquisition’s stock closed its first day of trading at $10.03. EarlyBirdCapital was the sole book-runner.

But the pricing date of ONS Acquisition (ONS.U proposed), an ESG-focused SPAC, was delayed again, The SPAC’s IPO was set for pricing Monday night (March 21, 2022). The deal’s size is 15 million units at $10 each. Ladenburg Thalmann is the sole book-runner.

An Australian SaaS company, Locafy Limited (LCFY), priced its tiny unit IPO on Thursday night (March 24): 1.45 million units at $4.125 each to raise $6 million. The stock started trading Friday at $3.34 – and closed at that same price, NASDAQ records showed. Locafy’s performance on its first day of trading marked it as a broken deal – down 19.1 percent from its IPO price.

The Israeli tech start-up, Rail Vision Ltd. (RVSN proposed), was tentatively set for pricing Thursday night. But Rail Vision delayed its pricing until the week of March 28th. The company filed an amended F-1 late Thursday afternoon (March 24, 2022) with a revamp in its pricing terms and a change in its sole book-runner.

Meanwhile, the SEC’s filing window is fielding a steady stream of SPAC IPOs and small-cap IPOs, along with a burgeoning list of IPO withdrawals. Many of the small-cap IPO filings are unit deals consisting of stock and warrants.

Next week’s IPO Calendar has two very small-cap IPOs and one SPAC on tap so far.

Stay tuned.

(For more information about these companies, please see our IPO Calendar. Click on the company’s name and the hyperlink will take you to the IPO Profile, which includes a link to the prospectus.)

(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)

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.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute change.