The biggest life sciences IPO of the year so far belongs to Legend Biotech.
The cancer drug developer was able to raise $423.8 million after pricing its shares well above the targeted price range. Legend, which has executive offices Somerset, NJ, had planned to sell 18 million shares in the range of $18 to $20 apiece. But investor interest in the company was strong enough to warrant boosting the target, and on Friday morning, Legend priced its shares at $23 each.
The biotech supplemented its IPO haul with a separate transaction. Former parent company and majority shareholder GenScript Biotech bought more than 1 million shares at the IPO price, adding another $24 million to Legend’s coffers.
Shares of Legend (NASDAQ: [[ticker:LEGN]]) reached as high as $39.49 each on Friday, before closing at $37 apiece, up 60 percent from the IPO price. Legend’s IPO is the biggest for a biotech company this year since cancer drug developer Revolution Medicines (NASDAQ: [[ticker:RVMD]]) raised $238 million in its stock market debut.
Investor interest in Legend was robust following the release of additional data for its lead compound, JNJ-4528, an experimental cell therapy for the blood cancer multiple myeloma. During the online meeting of the American Society of Clinical Oncology last weekend, Janssen Biotech, a Johnson & Johnson (NYSE: [[ticker:JNJ]]) subsidiary and Legend’s partner in the development of the drug outside of China, reported data from a Phase 1 study. In 25 of 29 patients, there was a “complete response” to the cell therapy, meaning that all signs of the cancer were gone.
The Legend drug targets a cancer protein called B-cell maturation antigen (BCMA). It’s found in abundance on the surface of multiple myeloma cells. There are no FDA-approved BCMA-targeting drugs yet, but the JNJ-4528 data make it a strong contender to become the first. A rival BCMA therapy from Bristol Myers Squibb (NYSE: [[ticker:BMY]]) and partner Bluebird Bio (NASDAQ: [[ticker:BLUE]]) was the first to be submitted to the FDA, but last month the regulator declined to review it and instead asked for more information. Analysts at SVB Leerink have said the setback for the Bristol/Bluebird drug reduces its lead over the J&J/Legend therapy by about four months.
A Phase 2 test of JNJ-4528 is already underway. Legend says in its IPO filing that based on the results of that study, plus the data from earlier tests, applications could be submitted to US and European regulators in the second half of this year. Next year, the company plans to seek approval for the cell therapy in Japan.
According to Legend’s prospectus, the company plans to apply between $160 million and $185 million of the proceeds toward further clinical development of its multiple myeloma drug. Another $60 million to $75 million is set aside for construction of manufacturing facilities. The company plans to spend $15 million to $20 million for the commercial launch of the drug, if it’s approved.
Legend was formed in 2014 as a China-based subsidiary of GenScript, a New Jersey pharmaceutical industry services provider whose shares are publicly traded in Hong Kong. Even though the IPO means that Legend is striking out on its own, GenScript will keep close ties to its former subsidiary. According to the prospectus, after the IPO and the private sale of shares to GenScript, the former parent company will own 66.1 percent of Legend.
Image by Wikimedia Commons user KGH under a Creative Commons license.
