Gene editing biotech Prime Medicine is thawing a frosty market with a $175 million IPO, one of the sector’s largest debuts this year, especially for a company with no clinical data to hand.
Prime today announced an upsized offering of nearly 10.3 million shares at $17 apiece. The biotech, which is helmed by President and CEO Keith Gottesdiener, an industry vet with experience at Merck and Rhythm Pharmaceuticals, expects the offering to close Oct. 24.
The preclinical company, which has yet to specify on its website which therapeutic areas it will focus on, is braving the cold IPO market, which all but froze over for biotech since 2021’s record-breaking year of listings. As valuations began to cool toward the end of last year, experts forecasted that 2022 would be light on filings as emerging biotechs watched their peers list their tickers just to take a beating and ultimately trade well below their initial price.
But Prime’s debut is a sign things may be heating up again, especially on the heels of allergy and inflammatory disease startup Third Harmonic’s $185 million IPO in late August.
Prime plans to use the proceeds, coupled with $180.6 million in cash and cash equivalents on hand as of June 30, to fund operations into 2025, according to an SEC filing.
Specifically, the Cambridge, Mass.-based biotech will allocate $90 million to continued R&D efforts, including preclinical studies; $65 million for studies that may enable human trials; and $50 million to develop early-stage manufacturing processes and build out a chemistry facility.
A remaining pot of $65 million will go to discovery-stage research and advancing the Prime Editing platform, a broad gene editing technology designed to only require one edit to be made at the correct position within a gene. The science, developed by Beam Therapeutics founder and Prime co-founder David Liu, Ph.D., along with Andrew Anzalone, M.D., Ph.D., holds the theoretical potential to repair 90% of known disease-causing genetic mutations across many organs and cell types, according to Prime.
Due to the early stage of Prime’s work, the biotech believes the IPO alone won’t be enough to complete the development and potential commercialization of any therapy programs, noting in SEC filings that additional capital will still need to be raised down the line.
The startup launched with a $315 million Series A last year, and is partnered with Beam Therapeutics, the base-editing biotech also founded by Liu. Under the deal, Prime licensed out the rights for Beam to use Prime editing in areas like sickle cell disease. In return, Beam gave Prime certain rights to technology and intellectual property.
Earlier this year, Prime shelled out $45 million cash for an exclusive option and research collaboration with Myeloid Therapeutics. The goal of the partnership is to develop more programmable gene-editing tech.
Prime is now entering the public markets as gene therapies are taking off. Bluebird bio’s recently approved Zynteglo and Skysona have made headlines, while CRISPR anticipates submitting its Vertex-partnered exa-cel, an ex-vivo gene-edited therapy for patients with sickle cell disease and transfusion-dependent beta thalassemia, to the FDA in 2023. If given the green light, exa-cel would be the first FDA-approved gene therapy to treat sickle cell disease, not to mention the first CRISPR therapy for a genetic disease.