Lexeo drops share price at last minute in attempt to raise $100M IPO
Lexeo Therapeutics has disclosed plans to join the coveted ranks of biotechs raking in nine figures from their Nasdaq offering, despite downsizing its ambitions over the past few days.
The clinical-stage gene therapy developer plans to sell off 9.09 million shares for $11 apiece, which would bring in gross proceeds of $100 million, Lexeo explained in a Nov. 2 release. Underwriters will also have 30 days to purchase up to an additional 1.3 million shares of common stock at the same price.
This marks a significant drop on the anticipated share price range of $13-$15 that the biotech set out in an SEC filing the previous day. Typically, companies are able to price their shares within their predicted range. When this doesn’t happen it can be because the IPO’s underwriters overestimated demand or they deliberately priced the stock lower to stimulate demand. Fierce Biotech has contacted Lexeo to ask if either of those options applied in this case.
Despite the reduced haul, the injection of $100 million will be useful for a company that ended June with $45.5 million in cash on hand. The shares are expected to begin trading on the Nasdaq this morning under the symbol LXEO, with the offering due to close Nov. 7.
Lexeo’s lead asset is currently being tested in a phase 1/2 trial for patients with Friedreich’s ataxia. The company has already hinted in its IPO filing last month that the drug is showing early signs of increasing production of the frataxin protein in one patient, which is deficient in people with the condition. More data on the asset is slated for the middle of 2024.
The biotech also has a phase 1/2 Alzheimer’s treatment that’s expected to complete trial enrollment before the end of the year with initial data expected in the second half of 2024.
In August, the company’s work received a welcome show of faith via a strategic investment from Sarepta to help fund a batch of cardiovascular gene therapies. The first of these, LEX2020, was recently given clearance by the FDA to start an initial clinical trial and dosing is set to begin early next year.
While biotechs brave enough to go public have been few and far between this year, there have been some notable success stories. In September, radiopharmaceuticals-focused RayzeBio overshot its own expectations by $80 million to raise $311 million from an IPO. The same week, Neumora brought in a respectable $250 million—bang on the neurological-disease-focused biotech’s estimate.
Since their listing, RayzeBio’s shares have hovered around their $18 opening price, closing trading Thursday at $20.54. However, Neumora hasn’t been as lucky with the stock originally priced at $17 but having since plunged 36% to $10.92.