The IPO Buzz: Sagimet Biosciences (SGMT) Dips in its NASDAQ Debut

Liver disease and cancer biotech Sagimet Biosciences (SGMT) shares slipped 50 cents to open at $15.50 – down 3.13 percent from its $16.00 IPO price – in its opening trade at 12:29 p.m. EDT today – Friday, July 14, 2023 – on the NASDAQ. Volume was 314,948 shares, NASDAQ records showed. The stock recovered to trade at $16.03 shortly after 1 p.m. EDT; it was trading flat at $16.00 at around 2 p.m. EDT. Sagimet Biosciences priced its slightly upsized IPO at $16.00 – the mid-point of its $15.00-to-$17.00 range – on Thursday night (July 13, 2023). The IPO was increased at pricing to 5.31 million shares – up from 4.69 million shares in the prospectus – to raise $85.0 million at the $16.00 mid-point pricing. 

Goldman Sachs, TD Cowen, Piper Sandler and JMP Securities were the joint book-runners.

Sagimet Biosciences’ IPO was increased by 625,000 shares – or 13.33 percent.

The Sagimet IPO raised $10 million more than the estimate, which was $75 million, under the terms in the prospectus.

The IPO’s upsizing lifted Sagimet Biosciences’ market cap to $354.8 million – up $10 million from the estimated valuation under the terms in the prospectus.

Sagimet Biosciences lead product candidate, denifanstat, is a once-daily pill undergoing evaluation in a Phase 2b clinical trial to treat NASH, also known as nonalcoholic steatohepatitis, or fatty liver disease. NASH is a chronic and potentially fatal liver disease for which there is currently no approved treatment in the United States and Europe.

Sagimet Biosciences is also evaluating denifanstat’s effectiveness as a treatment for two other indications – moderate to severe acne and recurrent glioblastoma multiforme (GBF), an aggressive form of brain cancer – in clinical trials in China conducted by its partner, Ascletis Bioscience Co. In the GBF (brain cancer) clinical trial, denifanstat is being evaluated in combination with an established cancer drug, a monoclonal antibody called bevacizumab.

Funds affiliated with VC giants Kleiner Perkins and New Enterprise Associates are Sagimet Biosciences’ biggest shareholders, the prospectus says.

Founded in 2006, Sagimet Biosciences is based in San Mateo, California.

Sagimet Biosciences, like most biotechs when they go public, has a balance sheet awash in red ink. The company reported a net loss of $28.35 million on no revenues for the last 12 months, according to the prospectus.

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