Upstream Bio valued at $1.1 bln in stellar debut as healthcare IPOs heat up
Upstream stock rises 26.5% above IPO price
Drug developer valued at $1.1 bln at open
Healthcare sector leads US IPO market in 2024
Adds background throughout, analyst comments in paragraphs 8,11,12, graphic
By Arasu Kannagi Basil
Oct 11 (Reuters) -Shares of Upstream Bio UPB.O opened 26.5% above the initial public offering price in their Nasdaq debut on Friday, valuing the drug developer at $1.05 billion.
The robust debut adds to the momentum building up in the biotech sector, which saw strong investor appetite for a clutch of drug developers when they listed on the stock exchange last month.
Separately, Kaiser Permanente-backed drug developer CAMP4 Therapeutics CAMP.O and TPG-backed medical device maker CeriBell CBLL.O also rose 1.5% and 36.8%, respectively, in their debuts on Friday.
Shares of Upstream, which is developing treatments for some respiratory disorders, opened at $21.50 apiece, above the IPO price of $17.
The company raised $255 million by selling 15 million shares, 20% more than initially planned, at the top end of its marketed range of $15 and $17 each.
The Waltham, Massachusetts-based company is currently testing its lead experimental candidate, verekitug, for the treatment of severe asthma and chronic rhinosinusitis with nasal polyps (CRSwNP), a condition characterized by benign growths that cause pain and stuffiness, in mid-stage trials.
Upstream expects to report data from the study of CRSwNP in the second half of 2025 and severe asthma in the second half of 2026.
"The company's claims of having a potential best-in-class drug for severe asthma as well as plans to explore the drug for chronic obstructive pulmonary disease, another highly prevalent and debilitating condition affecting millions worldwide, are causing investors to prick up their ears," said IPOX research analyst Lukas Muehlbauer.
HEALTHCARE SECTOR LEADS U.S. IPOS
U.S. healthcare IPOs have raised a combined $6.6 billion in 2024, the highest year-to-date total since 2021, according to data compiled by LSEG.
They account for 23% of the total IPO proceeds of $29.2 billion raised on U.S. exchanges this year, more than any other sector.
"Investor appetite is coming back as successful recent debuts show that healthcare firms can deliver strong value," Muehlbauer said.
"If this momentum holds, we could see continued strength in the biotech IPO market heading into 2025."
US IPO proceeds by industry sectors in 2024 https://reut.rs/3NmRLfz
Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar
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