The IPO market has become red hot — at least among venture capital–backed biopharma and other life sciences companies. In the past week, at least three companies in the sector filed plans to go public. Another detailed terms for a planned offering, and four other stocks began trading.
Most of these companies count hedge funds among their backers.
It helps that the stock market has once again flirted with new highs and that small-caps are poised to take off following the Federal Reserve’s 50-basis-point interest rate cut.
Most recently, Ceribell, which in August disclosed its intention to go public, filed updated plans. Six venture capital funds are listed in the filing as owners of more than 5 percent of the shares of the medical technology company, including entities affiliated with Rise Fund Clearthought, which currently owns 15.3 percent of the shares, and Global Value Investment Portfolio Management, with 10.1 percent.
In addition, two hedge funds previously invested in the company but don’t own at least 5 percent of the shares. RA Capital Management and Redmile Group both participated in the company’s $53 million Series C financing in 2021.
Last week, Camp4 Therapeutics also filed plans to go public. It is a clinical-stage biopharma company that is developing therapies to treat a broad range of genetic diseases. Among the company’s outside investors with more than 5 percent of the shares are Kaiser Permanente Group Trust and Kaiser Foundation Hospitals. Enavate Sciences owns 19.1 percent of the shares, 5AM Ventures has 15.9 percent, and Polaris Partners has 13.5 percent. No hedge fund appears to own a stake or to have participated in an earlier financing.
And Upstream Bio last week filed initial plans to go public. The company is developing treatments for inflammatory diseases, with an initial focus on respiratory disorders. Ten VC and hedge fund firms are listed as holders of more than 5 percent of the shares before the offering, including entities affiliated with OrbiMed Advisors, with 13.4 percent of the shares; Altshuler Shaham Provident Funds and Pension with 9.34 percent; and Decheng Capital Global Life Sciences Fund IV with 8.49 percent.
Meanwhile, one company — BioAge Labs — set terms for its planned IPO. The clinical-stage biopharmaceuticals company, which is working to treat metabolic diseases like obesity, plans to sell 7.5 million shares for between $17 and $19 per share. At the midpoint range, the company would raise $135 million.
At least eight VC or hedge fund firms own more than 5 percent of the shares before the offering, led by Andreessen Horowitz and Khosla Ventures. Hedge fund investors include RA Capital, which owns 5.8 percent of the shares, and Cormorant Asset Management, with 5.22 percent.
In the past week, at least four biopharma companies began trading.
Kairos Pharma, a clinical-stage biopharmaceuticals company advancing therapeutics for cancer patients, sold 1.5 million shares at $4 apiece in a tiny $6 million IPO. The stock is already down more than 45 percent from its IPO price.
The three others are in the green, including two companies that are each up by more than 40 percent.
Bicara Therapeutics has climbed more than 42 percent since it went public on September 12. It sold 17.5 million shares at $18 per share, the high end of the anticipated range. RA Capital owned 15 percent of the shares before the IPO.
MBX Biosciences, which is developing new treatments for endocrine and metabolic disorders, is up about 41 percent since going public on September 12. It sold 10.2 million shares at $16 a pop, the high end of its anticipated range. It originally planned to sell a little more than 8 million shares. Several hedge funds were major investors in the private company, including Orbimed, Deep Track Biotechnology Master Fund, and RA Capital.
Also on September 12, Zenas BioPharma sold 13.2 million shares for $17 apiece. The biopharma company is focused on immunology-based therapies. A slew of VC funds and corporate entities are listed among the 5 percent owners. At least one hedge fund, Rock Springs Capital, invested in the May 2024 upsized $200 million Series C preferred stock financing but is not a 5 percent owner.