Montreal cancer drug developer Repare Therapeutics Inc. is set to start trading Friday on the Nasdaq exchange after increasing the size of its initial public offering Thursday for the third time this week. It could become the latest in a slew of Canadian drug developers to reach a US$1-billion valuation, if recent trends hold.
Repare said in a release late Thursday it would sell 11 million shares at US$20 apiece. Its four U.S. underwriters - Morgan Stanley, Goldman Sachs, Cowen and Piper Sandler – also have the option to buy another 1.65 million shares at that price, meaning Repare could raise up to US$253-million in gross proceeds. The company started the week stating in a filing with the US Securities and Exchange Commision it would offer 7.4 million shares plus 1.1 million for underwriters at US$16 to US$18 a share, then upsized the offering Wednesday to 10 million shares at between US$18 and US$20 each. Repare revealed plans on May 29 to go public, targeting an US$100-million raise.
Biotech industry observers are watching closely to see if Repare’s stock follows the pattern of many other biotech companies that have gone public in recent months by spiking sharply on its first day of trading. In the past week alone, two California biotech developers - Vaxcyte Inc. and Avidity Biosciences LLC - saw their stocks pop by 50 per cent or more on their first day of trading. Several other stocks of drug developers have doubled in value since going public this year.
If Repare, which sports a valuation of more than US$730-million heading into its first day of trading, follows suit, it would join B.C.-based Zymeworks Inc and Aurinia Pharmaceuticals Inc. as Canadian-based drug developers to hit US$1-billion valuations on Nasdadq. Two other Canadian biotech developers, Clementia Pharmaceuticals Inc. – formerly led by Clarissa Desjardins, the wife of Repare CEO Lloyd Segal - and BlueRock Therapeutics, sold to foreign buyers last year for US$1-billion valuations.
Another Canadian cancer treatment developer, Hamilton-based Fusion Pharmaceuticals, is also in the process of going public on Nasdaq. Meanwhile, Chinook Therapeutics Inc., a kidney-disease drug developer jointly based in Vancouver and Seattle, said this month it would merge with Nasdaq-traded Aduro Biotech Inc. They follow three other Canadian biotech companies that went public or cross-listed on Nasdaq last year.
Repare is developing “precision oncology” drugs that attack genetic defects in cancerous tumours, preventing toxic cells from repairing their DNA. Repare aims to get its lead drug candidate into human trials this summer. In May, it struck a partnership with Bristol Myers Squibb to identify drug candidates that will see the pharmaceutical giant pay Repare US$65-million upfront, including a US$15-million investment in the startup. The Montreal company can earn up to US$3-billion if the drugs pass a series of development milestones and become commercial products.
Repare, founded in 2016, has previously raised more than US$150-million in venture capital from investors including leading US biotech financiers Versant Ventures, Orbimed, Cowen Healthcare Investments and BVF Partners as well as Canadian investors Fonds de solidarité FTQ and Amplitude Venture Capital. The company was co-founded four years ago by research scientists from New York University and Toronto’s Mount Sinai Hospital. It is aiming to get its lead molecule, which it calls RP-3500, into human clinical trials this summer.
Repare will trade under the ticker symbol RPTX.
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Sean Silcoff