Moderna Therapeutics on path to becoming biggest US biotech IPO in history

Moderna Therapeutics Inc is staging one of the biggest stock-market debuts for a biotechnology company in US IPO history with plans to raise up to $600 million.

Moderna is expected to set a price for its shares and sell them after the market closes Thursday, the eve of its trading debut.

Cambridge, Massachusetts-based Moderna, one of the most highly valued startups in health care, is trying to develop a new kind of drug and vaccine using the body’s own cellular machinery to protect against or even fight off disease.

The company develops drugs for the treatment of infectious diseases, genetic disorders, cancer and cardiovascular diseases, by using its novel messenger RNA technology to convey genetic information within cells. Moderna believes it can use mRNA to spur the body to produce its own therapeutic proteins.

Its partners include heavy hitters like AstraZeneca PLC (NYSE:AZN), Merck & Co Inc (NYSE:MRK) and Vertex Pharmaceuticals Inc (NASDAQ:VRTX).

Moderna plans to list on the Nasdaq under the ticker MRNA. The lead underwriters for the IPO are Morgan Stanley, Goldman Sachs and JPMorgan.

Drug Pipeline

The biotech’s operating expenses in 2017 topped $475 million. The company is years away from actual product sales, but Moderna currently depends on revenue from grants and its collaborations with other companies, which totaled just over $200 million.

Investors will pay close attention to the fact that Moderna has 21 drug and vaccine research programs, including 10 that have progressed beyond the laboratory and are being tested in humans.

It’s working on two cancer vaccines with one that targets solid tumors and the other that targets pancreatic cancer. It has a 50-50 global profit sharing with Merck on both the vaccines.

Drug discovery is an expensive business so it the biotech has high cash burn. MarketWatch reported that Moderna spent nearly $360 million on operating expenses in the first nine months of 2018  

“We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future,” the company said in its securities filing. 

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It’s been a banner year for IPOs with 200 companies having priced so far this year, raising more than $58 billion. The US IPO market is on track for the busiest year since 2014, according to research firm Renaissance Capital.

Biotech IPOs have been booming with nearly 61 companies in the healthcare sector going public.

Biotech companies credit the business-friendly tax package for making it possible for Big Pharma to pour cash into licensing deals, mergers and acquisitions — making the prospect of rich exit strategies for biotech companies more tangible.

Contact Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive 

Story by ProactiveInvestors