Alumis trims IPO, secures $250M for immune drug

Biotechnology firm Alumis has successfully raised $210 million in one of the sector's largest initial public offerings (IPOs) of the year, despite falling short of its initial projections. The company had aimed to sell approximately 17.7 million shares priced between $16 and $18 each, which would have netted them at least $282.5 million. Ultimately, Alumis sold around 13.1 million shares at the lower end of this range, augmenting their funds with an additional $40 million through a private stock sale to AyurMaya Capital Management, a significant equity holder. The shares are set to start trading on the Nasdaq stock exchange on Friday.

Although the IPO did not meet Alumis's initial expectations, it still stands as the third-largest biotech IPO of the year, according to data from BioPharma Dive. It is also one of the most profitable biotech offerings since late 2021, a period characterized by dwindling interest in sector IPOs after a prolonged bullish market. Alumis is leveraging growing investor interest in companies developing drugs for autoimmune diseases. Venture funding, acquisitions, and new stock offerings have surged in this sector. Since the beginning of 2023, IPOs from companies like Acelyrin, Kyverna Therapeutics, AbiVax, Apogee Therapeutics, and now Alumis have all surpassed the $200 million mark, a feat only a few other companies have achieved.

The focal point of Alumis's development efforts is a TYK2 inhibitor, a class of oral medication showing promise in treating various immunological conditions. One such TYK2 drug, Sotyktu from Bristol Myers Squibb, was approved by the Food and Drug Administration (FDA) in 2022 for treating plaque psoriasis. Alumis's drug, named ESK-001, is claimed to be more potent and selective than Sotyktu, although this has yet to be confirmed through testing. The company faces competition from other players in the field, including Takeda, which has a drug in late-stage testing acquired from Nimbus Therapeutics, as well as private biotech firms like Sudo Biosciences and Priovant Therapeutics, who are also developing next-generation TYK2 inhibitors.

Alumis plans to initiate a Phase 3 trial of ESK-001 for plaque psoriasis by the end of 2024. The drug is also being tested in Phase 2 trials for lupus and uveitis, and Alumis has another type of TYK2 drug in early testing stages for neuroinflammatory conditions. The company, originally known as Esker Therapeutics, was founded in 2021 and incubated by Foresite Labs, based in San Francisco. Foresite Capital, the investment firm behind Foresite Labs, holds a 33% stake in Alumis, making it the company's largest shareholder.

The company's leadership includes Martin Babler, a former Genentech executive who previously led Principia Biopharma, acquired by Sanofi in 2020. Despite a strong start to 2024, the pace of new biotech stock issues has decelerated, with only four biotech companies pricing offerings in the second quarter compared to eight in the first quarter, as per BioPharma Dive data. Moreover, the performance of most of this year's biotech IPOs has been underwhelming, with many trading below their offering price.