Two antibody startups file for IPOs during summer slump

Two U.S. biotechnology companies have announced plans for initial public offerings (IPOs), testing a challenging market for young drug startups that lack extensive clinical data or major investor backing. The companies, Zenas BioPharma and Bicara Therapeutics, are at different stages of drug development and are hoping to attract investor interest despite the tough market conditions.

Zenas BioPharma is working on a bifunctional monoclonal antibody called obexelimab, aimed at treating multiple immune diseases. Their most advanced program focuses on immunoglobulin G4-related disease, and they are currently enrolling patients for a Phase 3 trial. Bicara Therapeutics, on the other hand, is in Phase 1 testing with a bifunctional antibody named ficerafusp alfa, which is being developed to treat head and neck squamous cell carcinoma.

The pace of biotech IPOs has slowed after an initially promising start. So far this year, 15 drugmakers have priced their initial stock sales. This number suggests that 2024 might follow a similar trend to 2023, which saw 19 biotech IPOs, and 2022, which had 22. According to BioPharma Dive data, opportunities for investor exits still exist through IPOs and pharmaceutical company acquisitions, although these are mainly available to biotechs with clinical data.

A report from PitchBook, which tracks financing trends in biotech and healthcare, highlighted the mixed nature of the IPO landscape. Kazi Helal, a senior analyst at PitchBook, noted that while high-quality companies are going public, the numbers have decreased. Zenas and Bicara fit this profile, having both raised substantial venture funding and possessing clinical data. Both companies have each secured more than $350 million in venture investments.

Bicara Therapeutics raised significant funding last year through Series B and C rounds, totaling $273 million. Founded in 2021, the company initially had a broad pipeline but has since concentrated its efforts on testing ficerafusp alfa in combination with Merck's Keytruda. Indian pharmaceutical company Biocon and its chairman Kiran Mazumdar-Shaw hold a 35% stake in Bicara. The company was founded by Mazumdar-Shaw’s niece, Claire Mazumdar, a former investor at Third Rock Ventures. Other investors include RA Capital Management, Red Tree Venture, and Omega Fund.

Zenas BioPharma has a diverse range of backers, including Enavate Sciences, SR One, and Longitude Capital. After licensing obexelimab from Xencor, Zenas obtained promising Phase 2 data in IgG4-related disease, which led Bristol Myers Squibb to pay $50 million upfront for certain regional rights to the drug. Founded in 2019 by Leon Moulder, the former founder of Tesaro (acquired by GSK in 2018 for $5.1 billion), Zenas has built a strong foundation to advance its programs.

Neither Zenas nor Bicara has yet set a price range for its shares. The last significant biotech IPOs this year were from Alumis and Artiva Biotherapeutics, which raised $210 million and $167 million, respectively.

In summary, Zenas BioPharma and Bicara Therapeutics are testing the waters for biotech IPOs in a challenging market. While they face a tough environment, their strong clinical data and substantial venture backing may give them a better chance of success.