The IPO Buzz: Lexeo Therapeutics (LXEO) Prices IPO at $11.00 – $2.00 Below the Low End

Gene therapy startup Lexeo Therapeutics (LXEO) priced its IPO at $11.00 – $2.00 below the low end of its $13.00-to-$15.00 range – on Thursday night, Nov. 2, 2023. Lexeo Therapeutics slightly increased the number of shares to 9.09 million – up from 9.0 million in the prospectus – to raise $100.0 million. The deal raised $26 million less than the estimated proceeds, which were based on the terms in the prospectus.

Lexeo Therapeutics’ stock sank in its NASDAQ debut, closing at $10.05 – down 95 cents from its IPO price – for a loss of 8.64 percent. Volume was about 1.14 million shares. The day got off to a rough start for Lexeo: The stock slid to open at $9.50 – down $1.50 or off 13.64 percent from its IPO price of $11.00 – at 12:03 p.m. EDT today (Friday, Nov. 3, 2023) on the NASDAQ. Lexeo skidded further to trade at $9.33 at around 12:30 p.m. EDT. 

J.P. Morgan, Leerink, Stifel and RBC Capital Markets were the joint book-runners. Chardan was the lead manager.

Lexeo Therapeutics, based in New York, is developing two cardiac drug candidates – LX2006 to treat patients with Friedreich’s ataxia cardiomyopathy, already in a Phase 1/2 clinical trial – and LX2020 to treat arrhythmogenic cardiomyopathy, or ACM, with an IND recently approved by the FDA and a Phase 1/2 clinical trial expected to start in 2024. The gene therapy company is also developing LX1001, an Alzheimer’s disease drug candidate, in a Phase 1/2 clinical trial. Lexeo’s LX1001 is designed to treat Alzheimer’s disease patients who inherited the APOE4 gene (the strongest risk factor gene for Alzheimer’s disease) from both parents. Results from the clinical trials are expected in 2024, the prospectus says.

The company was founded in 2021 through a collaboration with the gene therapy research team at Weill Cornell Medicine. Lexeo Therapeutics also has a collaboration with the University of California, San Diego, for “research and development designed to advance our earlier stage cardiovascular pipeline,” the prospectus says.

Ronald Crystal, M.D., co-founder of Lexeo Therapeutics, owns more than 5 percent of the company’s stock. Crystal, a gene therapy pioneer who has been working in the field since the 1980s, is professor and chairman of Weill Cornell Medicine’s Genetic Medicine Department. He is also the director of the Belfer Gene Therapy Core Facility.

Principal shareholders include D1 Capital Partners, PBM Capital, Janus Henderson Investors, Longitude Venture Partners, Lundbeckfond Invest, Eventide Healthcare and Omega Funds.

Lexeo Therapeutics is not profitable. The gene therapy biotech reported a net loss of $63.73 million on $530,000 of grant revenue for the 12 months that ended June 30, 2023.

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