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Hedge Funds Stand to Gain From Biopharma IPOs

Ideaya Biosciences and Bicycle Therapeutics have filed plans to go public.

The market for initial public offerings is clearly heating up. 

Beyond the buzz of unicorns preparing to go public, two biopharmaceutical companies backed by hedge funds have disclosed their IPO plans with little fanfare. Ideaya Biosciences and Bicycle Therapeutics each filed on April 26 preliminary documents for a public offering.

Neither company is a unicorn, or a startup valued at more than $1 billion. But they have attracted significant venture capital nonetheless.

Ideaya Biosciences, an oncology-focused biotechnology company, is seeking to raise as much as $70 million in an IPO, according to its prospectus filed with regulators. One of its largest investors is Perceptive Advisors’ Perceptive Life Sciences Master Fund, which owns roughly 9.656 million shares, or 6.5 percent of Ideaya, the filing shows.

Perceptive invested in the company's series B convertible preferred shares in March 2018, when Ideaya announced it had completed raising $94 million of financing.

The life sciences hedge fund devotes less than 10 percent of its assets to private investments, according to an investor. Last year several of Perceptive’s private holdings went public, including Kodiak Sciences, a developmental-stage biopharmaceutical company, and Vapotherm, a medical technology company that develops products used to treat patients suffering from respiratory distress.

Perceptive did not respond to requests to comment. 

Meanwhile, Bicycle Therapeutics plans to raise as much as $86.25 million in its IPO. The clinical-stage biopharmaceutical company says in the prospectus that it is developing a novel class of medicines, which it calls bicycles, for diseases that are underserved by existing therapeutics. It plans to use the proceeds, in part to fund the development of several drugs in various stages of clinical trials, according to the prospectus.

One of its largest shareholders is Hong Kong-based Tybourne Capital Management (HK) Limited, which owns 12.56 percent of the shares. The stake includes a little more than one million series B1 preferred shares and 97,456 series B1 preferred share warrants, according to the filing.

Tybourne is led by Eashwar Krishnan, a former managing director at Stephen Mandel Jr.’s Lone Pine Capital. He was a senior analyst at Lone Pine for 11 years, where he was a “significant contributor to overall Lone Pine performance,” according to a Tybourne offering document earlier obtained by Institutional Investor.

Krishnan had moved to Hong Kong in 2007 to set up and manage Lone Pine’s operations in Asia. In fact, Lone Pine funded a portion of Tybourne’s start-up and operating expenses, according to Tybourne’s document. Prior to his stint at Lone Pine, Krishnan spent two years as an analyst in the principal investment group at Goldman Sachs Group.

Over the years, Tybourne has not been a very active investor in the private market, having only taken stakes in a handful of companies.

The firm did not respond to a request to comment.

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