NEW YORK - Allogene Therapeutics has made fast work of its biotech-unicorn status, taking a rapid road to Wednesday’s initial public offering. The company, worth approaching $3 billion after a 30 percent-plus pop in Thursday’s debut trading, hopes to sell off-the-shelf cancer immunotherapies. But Allogene is under a year old and its treatments may take 10 years to reach the market, if they make it at all.
Going public so quickly – the company raised $300 million in a Series A funding round only six months ago – bucks the trend of startups staying private for longer. In technology broadly, there has been plenty of private capital ready to invest in later rounds, notably from SoftBank's massive Saudi Arabia-backed Vision Fund. Allogene, though, may be a special case among special cases.
For one thing, it’s active in one of the hottest areas of medicine: tweaking the immune system to recognize and attack cancer. Such immunotherapies come in various flavors, but one of the most intriguing is modifying white blood cells using genetic engineering. Several have been approved which use a patient’s own cells but that can be difficult and risky, especially for seriously ill patients. Eliminating the artisanal element by creating off-the-shelf therapies that can be used on multiple patients, as Allogene hopes to do, may bring better medical and financial outcomes.
Meanwhile, Allogene founders Arie Belldegrun and David Chang are also striking while their reputations are hot. Their record at Kite Pharma has helped create the heady IPO brew. Gilead Sciences bought Kite, which developed bespoke immunotherapies, for $12 billion last year – before it even had an approved drug.
While scientific hype is every biotech firm’s favorite coin, good management is hard to find. Few teams are able to navigate the decade or so long process of finding a promising compound, running large trials, and keeping both regulators and Wall Street on board.
Despite the promising ingredients, Allogene is still a bet on unproven technology, and it has only one drug in early clinical trials. The more than $300 million the company has raised will at least give it plenty of cash to chase its clinical goals. Whether or not public investors end up winning, the public at large can celebrate that potential.
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- Allogene Therapeutics priced an initial public offering of 18 million shares at $18 each on Oct. 10, giving the immunotherapy company a market capitalization of over $2 billion counting a greenshoe option granted to underwriters. The stock began trading Oct. 11, rising more than 30 percent to $23.64 at 12:10 p.m. EDT.
- Allogene was founded in December 2017. In April, the company raised $300 million in Series A funding. Pfizer injected drug candidates and cash into the firm in exchange for shares, as well as possible royalty and milestone payments on the therapies. Pfizer has a roughly 19 percent stake in the company, following the IPO.
- The company was founded by Arie Belldegrun and David Chang, who had been the chief executive and chief medical officer, respectively, at Kite Pharma. Gilead Sciences purchased Kite for $12 billion in 2017.
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