- Gene editing startup Prime Medicine has raised $175 million in an initial public offering, and will start trading Thursday on the Nasdaq stock exchange under the ticker symbol “PRME.”
- The Cambridge, Mass.-based startup on Wednesday sold about 10.3 million shares at $17 apiece. Its IPO is the sector’s sixth-largest by proceeds in 2022, and the biggest this year for a company not yet in human trials, according to BioPharma Dive data.
- Though the number of biotechnology companies hitting Wall Street has slowed to a trickle in 2022, gene editing companies like Prime may have better luck due to the past successes of Beam Therapeutics and Verve Therapeutics, said Kevin Eisele, a managing director at investment firm William Blair.
Plunging stock prices shook the biotech sector this year. Young companies attempting to go public found little appetite for the sky-high valuations that were common in 2020 and 2021’s bull run of IPOs. Some investors described that period as resulting from “a lack of discipline.”
Recently, companies have been more likely to try and prolong the cash raised in Series B rounds or raise additional private funding before making a debut on the Nasdaq. A few have opted for alternatives such as reverse mergers.
Though the rate of biotechs going public remains slow, the market hasn’t scared off all companies.
According to Eisele, the appetite for gene editing IPOs is “immense.”
“It’s a technology that has the ability to really serve patients who have debilitating genetic diseases that don’t necessarily have a lot of alternatives, and so the market opportunity here is really exciting,” Eisele said.
Though a company like Prime is still early in its drug discovery, it is partnered with Beam and could attract larger drugmakers as well, he said.
The ability of companies like Beam — which was co-founded by Prime co-founder David Liu — and Verve to hold their values despite the downturn could help whet investor appetite. Both are among the few companies that went public in 2020 and 2021 and are still trading above their initial stock price.
Prime’s IPO is the 19th in the biotech industry this year, compared to more than 90 this time last year, according to data from BioPharma Dive. Prime’s IPO follows on the heels of Third Harmonic Bio’s successful public offering in September. A cancer drug startup, Acrivon Therapeutics, filed to go public on Monday, and two other small drugmakers, Intensity Therapeutics and Alopexx, are scheduled to price offerings this week.
Prime is a “platform” biotech, built around a gene editing technology it will use to develop several medicines, rather than a “product” biotech concentrated more closely on a single drug.
Prime initially aimed for a roughly $160 million IPO after raising more than $315 million in private financing, regulatory filings show. The company priced within its projected $16 to $18 per share range, but raised its IPO total by selling about 1.6 million more shares than intended, a sign of investor interest in the offering. That figure could climb higher if underwriters exercise their right to buy another 1.5 million shares at the IPO price.
Prime claims its “prime editing” is more precise than other CRISPR-based gene editing techniques. Though it shares some similarities with CRISPR, it can swap out specific DNA letters as well as edit out or add sequences of nucleotides.
The company has 18 research programs across diseases of the blood, liver, ear, eye and lung. None are in human trials. Its IPO filing did not reveal when it expects to begin its first Phase 1 trial.