6:09 PM
 | 
Dec 06, 2018
 |  BC Extra  |  Financial News

Moderna sets IPO record with upsized $604M offering

Brushing aside market volatility that has led several biotechs to miss their desired valuations in recent weeks, Moderna Inc. (NASDAQ:MRNA) raised $604.3 million in an upsized IPO late Thursday through the sale of 26.3 million shares at $23. The deal, which values the mRNA company at $7.6 billion, sets the record for the largest NASDAQ IPO for a biotech.

The stock is expected to begin trading on Friday.

Moderna had proposed to sell 21.7 million shares at $22-$24 in the offering; at the mid-point, the company would have raised $500 million and been valued at about $7.5 billion.

Founding investor Flagship Pioneering, which launched Moderna in 2010, held a 19.5% pre-IPO stake in the company. CEO Stéphane Bancel held 10%.

Moderna knocks Talecris Biotherapeutics Inc. out of the top spot for largest biotech IPO on the exchange. The plasma protein company raised $550 million in 2009; however, unlike Moderna, it had multiple marketed therapies at the time of its listing. Grifols S.A. (Madrid:GRF; NASDAQ:GRFS) acquired Talecris in 2011.

Underwriters on Moderna’s deal are Morgan Stanley, Goldman Sachs, J.P. Morgan, BofA Merrill Lynch, Barclays, Piper Jaffray, Oddo BHF, Oppenheimer, Needham and Chardan.

Earlier this week, Moderna dropped European investment bank Bryan Garnier & Co. as an underwriter. In an SEC filing issued on Dec. 4, Moderna said a "previously-named proposed underwriter that will not participate in this offering" made "unauthorized communications" regarding the offering.

Bryan Garnier, which was named as an underwriter in Moderna's two previous filings, was not listed in the Dec. 4 filing.

In the filing, Moderna also stated that neither the company nor its other underwriters were involved in the preparation or distribution of the unauthorized communications, and they did not have knowledge of the communications until after they were distributed.

Moderna’s pipeline includes 21 programs, including 10 clinical candidates, across six treatment paradigms: prophylactic vaccines, cancer vaccines, intratumoral immuno-oncology, localized regenerative therapeutics, systemic secreted therapeutics and systemic intracellular therapeutics.

The prospectus did not describe any imminent catalysts with specific near-term milestones.

Its most advanced, localized regenerative therapy AZD8601, is in a Phase IIa study to treat ischemic heart disease. The therapy encodes vascular endothelial growth factor-A (VEGF-A), and is partnered with AstraZeneca plc (LSE:AZN; NYSE:AZN).

Moderna had $1.2 billion in cash at Sept. 30. Prior to the IPO, it had raised $1.8 billion in equity funding since its inception in 2010, and had received about $800 million in partner revenue from deals with AstraZeneca, Merck & Co. Inc. (NYSE:MRK), Alexion Pharmaceuticals Inc. (NASDAQ:ALXN) and Vertex Pharmaceuticals Inc. (NASDAQ:VRTX). Alexion terminated the partners’ 2014 deal last year.

Moderna's record IPO comes as other biotechs have had trouble achieving their desired valuation as they list on the exchange. In the past two months, at least six biotechs have gone public with lower valuations than they would have received at the midpoint of their proposed range (see "Centrexion Steps Back From IPO Amid Volatile Market").

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