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Big biotech swings: 2016 IPO AveXis pops 82%, 2018 IPO Menlo drops 77%


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•  Recent acquisitions and clinical trial stumbles show the high-risk, high-return nature of biotech IPOs .

Betting on a biotech buyout...

The billion-dollar biotech buyouts continue. News broke on Monday that Novartis agreed to buy gene therapy bitoech  AveXis ( AVXS ) for $218 per share, or $8.7 billion. AveXis went public in February 2016, by offering shares at $20 with a market cap of $458 million.

A number of other gene therapy biotechs rallied on the news, including 2015-2018 IPOs Spark Therapeutics ( ONCE ), Audentes Therapeutics ( BOLD ) and Nitestar Therapeutics ( NITE ).

...and hoping to avoid clinical trial failure
Also on Monday, January 2018 IPO Menlo Therapeutics ( MNLO ) plummeted 77% after announcing that its treatment for severe skin itch failed to meet its primary or key secondary efficacy endpoints. It is now the worst-performing IPO of 2018 with a -52% return; it closed Friday as the year's second-best performer.

Another high-flying 2018 IPO,  Solid Biosciences  (SLDB), had a similar drop in mid-March when the FDA placed a full clinical hold on its trials (the prior partial clinical hold was cited as a key risk in our  pre-IPO analysis ). 

IPO Pro's streamlined dashboard features the daily, weekly and monthly movers in the IPO market. See Monday's snapshot:

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AveXis' acquisition is only the latest in a series of large M&A deals in the biotech space , particularly in gene and cancer therapy:

Recent Billion-Dollar Buyouts of Biotech IPOs
Biotech
Business
Acquirer
Amount Paid
IPO Date 
IPO Price
Acquisition Date
Acquisition Price
AveXis ( AVXS ) Novartis
$8.7 billion
02/10/16
$20.00
04/08/18
$218.00 (+990%)
Early-stage biotech developing a gene therapy for spinal muscular atrophy.
Ablynx (ABLX) Sanofi
$4.8 billion
10/24/17
$17.50
01/28/18
$55.00 (+214%)
Developing single domain antibodies derived from llamas for various diseases.
Juno Therapeutics (JUNO) Celgene
$9.0 billion
12/18/14
$24.00
01/22/18
$87.00 (+263%)
Developing T-cell therapies for lymphomas, leukemias and other cancers.
Ignyta (RXDX) Roche
$1.7 billion
03/13/14
$9.15
12/22/17
$27.00 (+195%)
Clinical-stage biotech developing targeted cancer therapeutics.
Kite Pharma (KITE) Gilead
$11.9 billion
06/19/14
$17.00
08/28/17
$180.00 (+959%)
Biotech developing cancer immunotherapies with the National Cancer Institute.


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The article Big biotech swings: 2016 IPO AveXis pops 82%, 2018 IPO Menlo drops 77% originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com.

Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital's Renaissance IPO ETF (symbol: IPO) , Renaissance International ETF (symbol: IPOS) , or separately managed institutional accounts may have investments in securities of companies mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: News Headlines , IPOs
Referenced Symbols: ONCE , BOLD , NITE , MNLO



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