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Fresh off ASCO myeloma data, Legend Bio gets $424M in biotech’s biggest IPO of 2020

Legend Biotech, a Nanjing, China-based developer of cell therapies for cancer, is raising just over $420 million in an initial public offering, announcing Friday the pricing of 18.4 million shares at $23 apiece.
The biotech upsized the offering, or priced shares higher than it had originally planned, a signal of high demand for an IPO. Its total haul easily eclipses the year’s previous top IPOs, and marks the largest initial offering in the sector since Danish firm Genmab’s offering in July 2019.
Legend’s offering comes right after a multiple myeloma cell therapy it developed and licensed to Johnson & Johnson produced more encouraging results at the American Society of Clinical Oncology’s yearly meeting. It was also one of three biotech IPOs to price Thursday, which put the sector ahead of its 2019 pace despite economic disruption from the pandemic.

Legend Biotech, a subsidiary of Hong Kong firm GenScript, has become increasingly known in U.S. biotech circles since cutting a deal with Johnson & Johnson two and a half years ago.

In the December 2017 agreement, J&J paid $350 million in upfront cash to acquire rights to a cell therapy for multiple myeloma that had just turned heads at the year’s biggest cancer meeting months earlier. The data set Legend’s CAR-T treatment up to be a contender in an increasingly competitive race to bring the cutting edge technology to multiple myeloma, a persistent and deadly cancer of the bone marrow.

Since that time, Legend’s program has emerged as the primary competitor to another CAR-T treatment from Bristol Myers Squibb and partner Bluebird bio. In May, the FDA rejected an approval application for the two companies’ cell therapy, known as ide-cel. Bluebird and Bristol plan to resubmit their filing by the end of July, however, and European regulators have since begun reviewing the product as well. That keeps the two ahead of Legend and J&J, but their lead has narrowed.

In the meantime, Legend’s cell therapy, termed JNJ-4528 by J&J, has continued to impress. The most updated results from an early stage study, delivered at ASCO last month, showed that all 29 patients in the trial — people who had failed several prior therapies — had responded to treatment, and 25 of them had no trace of cancer after a median of 11.5 months of follow-up time. The results make JNJ-4528 “a major competitor in relapsed/refractory multiple myeloma,” SVB Leerink analyst Mani Foroohar wrote recently.

J&J plans to file the drug for approval in the U.S. in the second half of this year, Craig Tendler, J&J’s vice president of oncology clinical development, said in a recent interview. An application for approval in Europe is also expected this year, according to a regulatory filing from Legend.

Legend has now parlayed its success into the largest U.S. biotech IPO of 2020, far outpacing the $274 million raised by Revolution Medicines earlier this year. The IPO is the top initial biotech stock offering in the U.S. since Danish antibody developer Genmab got roughly $580 million in 2019. Legend’s haul could grow, as well, since underwriters have the option to buy another 2,763,750 shares at the IPO price.

The cash will help Legend advance other CAR-T therapies for additional blood cancers and solid tumors. Three of those programs are in early testing in China, and all of them are “autologous” treatments, meaning they are genetically engineered from the cells of cancer patients in a lengthy, complex procedure.

Aside from the upfront check, Legend has gotten an additional $110 million in cash from J&J, and could get another $1.24 billion in future payments if JNJ-4528 continues to progress.

Legend was one of three biotechs to price their first U.S. stock offerings on Thursday, along with Applied Molecular Transport and Calliditas Therapeutics. Another, Lantern Pharma, was expected to price Thursday. There have now been 18 biotech IPOs in 2020, versus 17 by this point in 2019. Another eight offerings, however, quickly followed before the end of June 2019.