Lexeo Therapeutics Slashes IPO Price to Secure $100M Funding

Lexeo IPO Drops Price for $100M Fund

Lexeo Therapeutics has revealed its intention to generate substantial capital through a Nasdaq listing, despite having recently scaled back its financial targets.

The gene therapy company in the clinical stage is set to offer approximately 9.09 million shares at a price of $11 each, as stated in a press release dated November 2. This would amount to $100 million in gross proceeds. Moreover, underwriters are granted a 30-day window to acquire up to an extra 1.3 million shares at the identical share price.

The company has seen a noteworthy decrease from its initial expected share price range of $13 to $15, which was outlined in a filing with the Securities and Exchange Commission just one day prior. While companies typically manage to set their share prices within their forecasted range, a deviation from this range may suggest either an overestimation of market demand by the IPO’s underwriters or a strategic underpricing to encourage demand. 

Also Read: Biotech IPOs: Abivax And Lexeo Debut On Nasdaq, Apnimed Delays Listing

Despite the downturn in expected proceeds, the $100 million capital boost is significant for Lexeo, which reported having $45.5 million in cash as of the end of June. The company’s shares are set to commence trading on the Nasdaq under the ticker “LXEO” this morning, with the offering expected to conclude by November 7.

Lexeo is currently evaluating its primary candidate in a phase 1/2 trial for patients with Friedreichā€™s ataxia. Indications from the company’s IPO filing last month suggest the treatment shows promise in increasing frataxin protein production in at least one individual, addressing a key deficiency in those with the disease. Detailed results on the candidate are anticipated in mid-2024.

Furthermore, the firm is progressing with a phase 1/2 Alzheimerā€™s disease therapy, with plans to finish enrolling participants by year-end and initial findings expected in the latter half of 2024.

In August, Sarepta’s strategic investment endorsed Lexeo’s portfolio of cardiovascular gene therapies. The FDA has recently approved the company’s LX2020 for an initial clinical trial, with dosing planned to commence early in the coming year.

Also read: Adlai Revives Novartisā€™ Abandoned Cancer Drug, Raises $57.5M In IPO To Fund Phase 3 Trial

Public offerings in the biotech sector have been scarce this year, yet some companies have managed to stand out. RayzeBio, for instance, exceeded its IPO goal by $80 million, raising $311 million in September. During the same timeframe, Neumora secured a solid $250 million, meeting its projection head-on.

Post-IPO, RayzeBio’s stock price has remained near the $18 debut price, closing at $20.54 on Thursday. Neumora, on the other hand, has seen its stock fall 36% from the initial $17 to $10.92.

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