The IPO Buzz: Contineum Therapeutics Prices Downsized IPO at $16.00 – Low End – & Stock Falls in Debut

Contineum Therapeutics (CTNM), a Phase 1/Phase 2 biotech, priced its downsized IPO at $16.00 – the low end of its $16.00-to-$18.00 range – on Thursday night, April 4, 2024. The deal’s size was slashed to 6.88 million shares (6,875,000 shares) – down from 8.8 million shares in the prospectus. Contineum Therapeutics raised $110.0 million – well below the estimated IPO proceeds of $150 million, which was based on pricing at the $17.00 mid-point. 

The stock fell $1.50 from its IPO price to open at $14.50 at 12:35 p.m. EDT today – Friday, April 5, 2024 – on the NASDAQ on volume of 241,676 shares. By 1:41 p.m. EDT, Contineum Therapeutics’ stock was trading at $14.53, down $1.47 or off 9.2 percent on volume of 755,888 shares.

Goldman Sachs, Morgan Stanley, Stifel and RBC Capital Markets were the joint book-runners.

The low-end pricing reflected an increasing sense of caution among IPO investors about early-stage biotech IPOs after a couple of recent flops – Boundless Bio (BOLD) last week and Metagenomi (MGX) in early February.

The shift in sentiment yesterday on Contineum’s IPO indicated that IPO investors decided to pay less attention to this Phase 1/Phase 2 biotech’s promise – reflected in $50.0 million from Johnson & Johnson in 2023 license and collaboration revenue – and to focus more on protecting themselves from a potential loss on a fairly early-stage biotech IPO.

Contineum Therapeuticsbased in San Diego, is developing PIPE-307, its oral drug candidate to treat depression and relapse remitting MS, in collaboration with Johnson & Johnson. PIPE-307 is in a Phase 2 trial to treat relapse remitting MS, the prospectus says. PIPE-307 is a novel small molecule selective inhibitor of the muscarinic type 1 M1 receptor (M1R), according to the prospectus.

Contineum Therapeutics is also developing a wholly owned drug candidate, known as PIPE-791, to treat IPF (idiopathic pulmonary fibrosis) and progressive multiple sclerosis (progressive MS).

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