The IPO Buzz: Turnstone Biologics Prices Upsized IPO at $12.00 – Low End

Turnstone Biologics Corp. (TSBX) priced its upsized IPO at $12.00  – the low end of its $12.00-to-$14.00 range – on Thursday night (July 20, 2023). The company increased the size of its IPO to 6.67 million shares (6,666,667 shares) – up from 5.8 million shares in the prospectus. The early-stage cancer biotech’s IPO raised $80.04 million. That’s an increase of $4.64 million from the estimated IPO proceeds of $75.4 million, which had assumed pricing at the $13.00 mid-point of 5.8 million shares. A total of 866,667 shares were added at pricing. The pricing terms – a little more stock at the low end – gave Turnstone Biologics a market cap of $266.26 million.

Shares of Turnstone Biologics ended their first day of NASDAQ trading at $11.00 – down $1.00 for a loss of 8.33 percent. The stock had opened at $11.40 – down 60 cents or off 5 percent from their $12.00 IPO price, at 11:59 a.m. EDT today – Friday, July 21, 2023 – on NASDAQ. Volume was about 212,000 shares, according to NASDAQ. By 12:04 p.m. EDT, Turner Biologics popped above its IPO price to touch $12.14. The stock then dipped again to trade at around $11.79 at about 12:10 p.m. EDT. 

BofA Securities, Leerink Securities and Piper Sandler were the joint book-runners of Turnstone Biologics’ IPO.

Like many biotech IPOs, Turnstone Biologics’ deal was a fast launch. The company disclosed its IPO terms in an SEC filing early Monday (July 17, 2023) and launched the IPO for pricing on Thursday night.

Betting on Cancer-Killing Cells

Turnstone Biologics, based in La Jolla, California, is a Phase 1 clinical biotech company developing TILs – tumor-infiltrating lymphocytes – a type of cell therapy that harnesses the patient’s own immune cells to target their tumors and kill cancer cells. Turnstone has started two Phase 1 clinical trials for its lead candidate, TIDAL-01:

*A multi-site trial to treat breast cancer, colorectal cancer and uveal melanoma, and

*An investigator-sponsored trial with H. Lee Moffitt Cancer Center and Research Institute, in both cutaneous and non-cutaneous melanomas.

Turnstone Biologics says that it expects to provide an initial clinical update from both trials in mid-2024, the prospectus says.

Takeda Pharmaceuticals, a former collaboration partner, entered into a non-binding agreement to indicate interest in buying up to $8 million of stock in the IPO, according to the prospectus. If that did not happen, then Turnstone Biologics said it would sell $8 million of stock to Takeda in a private placement that will run concurrent with the IPO.

Turnstone Biologics’ two Big Pharma collaboration partners – Takeda and AbbVie – have terminated their agreements with the cancer biotech, the prospectus says.

The IPO has given Turnstone Biologics some breathing room. The company had only $63.97 million in cash at March 31, 2023, and faced “going concern” risk, in the opinion of its independent public accounting firm, according to the prospectus.

Turnstone Biologics plans to use up to $75 million of the IPO proceeds to provide funding for its Phase 1 trials, the prospectus says.

As an early-stage clinical biotech, Turnstone Biologics does not have any revenue generated by products.

The company, however, did have collaboration revenue of $81.89 million – all from Takeda – for the 12 months that ended March 31, 2023, and a net loss of $18.1 million. That collaboration revenue is not sustainable, however, due to Takeda’s termination of its collaboration partnership with Turnstone Biologics.

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