IPO Roundup: Guardant prices IPO above high end of range, while Kodiak Sciences' pricing comes up short

It was a tale of two very different pharma IPOs. Cancer detection firm Guardant Health Inc (NASDAQ:GH) got an enthusiastic reception, while Kodiak Sciences Inc (NASDAQ:KOD) felt the frost.

Redwood City, California-based biotech Guardant Health which sells blood tests to track and detect cancer raised $237.5 million in its US initial public offering by selling 12.5 million shares for $19 each, after marketing them at a range of $15 to $17, according to data compiled by Bloomberg.

Since it launched its liquid biopsy, Guardant360 molecular diagnostic test, in 2014, Guardant’s tests have been given to over 70,000 people. The company said in its IPO filing with the US Securities and Exchange Commission that its goal is to create an annual blood test that could detect cancer early, when it is most curable.

“We believe our tests can expand the scope of precision oncology to earlier stages of the disease, improve patient outcomes and lower health-care costs,” Guardant said in its filing.

The company backed by SoftBank Group said its cancer tests provide a less-invasive and often less costly alternative to tissue biopsies to collect samples.

The company pointed out in its filing that the average cost of a lung biopsy is $14,670, while the list price for Guardant360 is $7,800 for US patients.

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Guardant estimated the market opportunity for its current commercial and pipeline products at over US$35bn in the United States.

Money and scale are important as Guardant has strong competition in the guise of Silicon Valley company Grail, spun out of DNA sequencing giant Illumina.

Palo Alto, California-based biotech start-up Kodiak Sciences Inc (NASDAQ:KOD) said Thursday its initial public offering priced at $10 a share, which is below the expected range of $13 to $15 a share. It raised $90 million in the IPO and if all the options granted to underwriters are exercised, the sum could rise to $93.15 million.

According to an SEC filing, the company plans to use proceeds for clinical trials of its retinal disorder eye-drug treatment, KSI-301, for the cure of wet age-related macular degeneration and diabetic retinopathy. Kodiak, which has 28 employees has no reported revenue. It said it booked a loss of US$27.9mln in 2017, compared with US$17.1mln in 2016.

Morgan Stanley, Bank of America Merrill Lynch and Barclays are listed among the underwriters. The stock is expected to begin trading Thursday on the Nasdaq under the ticker symbol “KOD.”

Contact Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive 

Story by ProactiveInvestors