Alumis reduces IPO, adds private placement before Nasdaq debut

In the latest indication that the biotech industry’s return to public markets remains tepid, Alumis has scaled back its IPO as the company readies for its Nasdaq debut today. Initially, the company had announced plans to offer 17.6 million shares of its common stock at $17 per share at the beginning of the week. However, a late-night release on June 27 revealed that Alumis has now reduced this offering to 13.1 million shares priced at $16 each.

Additionally, the number of shares allocated for underwriters has been decreased from 2.6 million to 1.9 million. Alongside the IPO, Alumis has also arranged a private placement of 2.5 million shares of common stock at $16 each to AyurMaya Capital Management Fund, an existing investor. This concurrent private placement is expected to close by July 22.

Even with the combined proceeds from the IPO and the private placement, Alumis anticipates raising only about $250 million before deducting various expenses. This figure is notably lower than the $274 million the company had been expecting from the IPO alone earlier this week, even after accounting for expenses.

Starting today, Alumis’ shares will begin trading on the Nasdaq under the ticker “ALMS.” The biotech company has previously indicated its intention to use part of the proceeds from the IPO to advance the development of its leading asset, an allosteric tyrosine kinase 2 (TYK2) inhibitor known as ESK-001. The company plans to initiate multiple phase 3 trials later this year for ESK-001 in treating moderate to severe plaque psoriasis. Furthermore, Alumis will continue ongoing phase 2 trials for ESK-001 targeting eye inflammation known as uveitis, as well as systemic lupus erythematosus.

In its recent announcement, Alumis did not specify the reasons behind lowering its IPO expectations. However, the biotech sector has faced significant challenges in public markets this year, with several companies experiencing declines in their valuations shortly after going public. A case in point is Australia-listed Telix Pharmaceuticals, which decided at the last minute to withdraw from its planned Nasdaq IPO earlier this month, citing dissatisfaction with the terms on offer. This move serves as a reminder that listing on public markets is a complex and often challenging process.

The reduction in Alumis' IPO size and the concurrent private placement highlight the current market uncertainties and investor hesitancy within the biotech sector. Despite these challenges, Alumis remains committed to pursuing its clinical development programs and advancing its therapeutic candidates through the pipeline. The company’s strategy underscores the ongoing need for innovative treatments in areas such as psoriasis, uveitis, and lupus, where significant unmet medical needs persist.

As the market watches closely, Alumis’ performance on the Nasdaq will likely serve as a barometer for other biotech companies considering public offerings in the near future. The sector will be keen to see if Alumis can leverage its Nasdaq debut to achieve its clinical and financial goals amid a challenging market environment.