Candel gets busy IPO week moving with downsized raise as Rajiv Shukla's third SPAC goes public

27 Jul 2021
endpts.com
Small molecular drugAcquisitionIPO
Editor’s note: Interested in following biopharma’s fast-paced IPO market? You can bookmark our IPO Tracker here . In a week that’s expected to see several biotechs price their IPOs, Candel Therapeutics got things kicked off Tuesday with a muted opener. The company helmed by former GlaxoSmithKline vet Paul Peter Tak made its way to Nasdaq thanks to a $72 million raise, which was downsized by about 15% than originally anticipated, according to Renaissance Capital . Candel priced at $8 per share after initially seeking to launch in the $13 to $15 range. Like many other biotechs, Candel had penciled in $100 million in its first S-1 draft when it filed at the end of June. But it revised that estimate down to $85 million last week, and then further downsized it again on Monday. Despite the lower-than-expected raise, IPOs are continuing to bring record amounts of cash into the biotech industry. Per the Endpoints News tally , the combined raise now sits at $11.35 billion from 69 companies. And Candel’s raise comes as another slew of biotechs prepare to price their own offerings later this week, including Nuvalent, Icosavax, Tenaya, MaxCyte, Rani, Omega, Immuneering, RallyBio, Ocean Biomedical, IN8bio and Context Therapeutics. Including Candel, this week’s slate of a dozen biotech IPOs is on track to be the busiest of the year and likely to push the total raise past $12 billion. Should every IPO price as planned — in biotech and other sectors, with financial trading app RobinHood and language-learning service DuoLingo expected to price — this week will be the busiest in at least two decades for the US IPO market, Renaissance Capital said. Now with Tak on board, Candel is furthering its mission to go after oncolytic viruses, which come with a checkered history. Amgen’s Imlygic remains the only approved product in the space, standing out among a slew of failures. But Candel is taking a different approach, aiming to fire non-replicating viruses at tumors to try to kill cancer cells and cause enough damage to jumpstart the immune system into action. Researchers are also seeking to use the virus as a vector to deliver transgenes for an enzyme, which would then convert a companion small molecule prodrug into cancer killing mode. For his part, Tak will take home a 1.6% stake in the company once it completes the offering. Candel also bestowed upon him more than $2.3 million in option awards last year, making up the majority of his pay package, per the S-1. The big winner of the IPO, though, is Paul Manning and PBM Capital. Manning’s firm owns the largest share in Candel at 21.7%. Candel will trade under the ticker $CADL . It plans to use IPO funds for two Phase III trials in its lead candidate, construction of a manufacturing facility and other studies for a second program. In addition to Candel, another SPAC has priced. And it comes from one of biotech’s earliest SPAC cheerleaders. Rajiv Shukla’s third blank-check company — dubbed Alpha Healthcare Acquisition III — hit the market Tuesday, pricing at $150 million after filing back in March. Shukla filed for that SPAC just a few weeks after helping take the biotech Humacyte public in a $255 million reverse merger . According to the SPAC’s S-1 filing, Shukla and his crew are focusing on a wide range of biotech companies. The target size of the yet-to-be-acquired company will range from $250 million to $3 billion, the filing said. Per their estimates, that range comprises more than 400 companies. Shukla’s first SPAC filed back in 2017 and found a partner nearly two years later when it took DermTech public in 2019. Like IPOs, SPACs have seen a boom over the last year and a half. Through 2021 so far, 50 healthcare SPACs and mergers have brought nearly $17 billion into the biotech industry, per the Endpoints tally.
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