2019 IPO Landscape

2019 IPO Landscape Photo credit: jxfzsy, Getty Images Table of Contents Alector, developing immunity-based neurological disease drugs, goes public . 3 Gossamer Bio becomes 2019’s second biotech ‘unicorn’ to go public . 4 BridgeBio files for $225M initial public offering . 5 Change Healthcare files for $100M IPO . 6 Shares surge in the public market debuts of Livongo and Health Catalyst . 7 Five tidbits and takeaways from Livongo’s IPO filing . 9 Dental company SmileDirectClub files to go public . 10 2019 is the year of the digital health IPO, but will it last? . 11 The topsy turvy world of medtech startup exits these days . 14 2019 proved to be a particularly robust year for digital health companies going public. Long-anticipated, the IPOs for Health Catalyst, Livongo, Change Healthcare, and Phreesia reflected a maturing digital health sector, which has attracted investment through a combination of strong product offerings, increasing revenues, solid management teams, and promising growth potential. Digital health has seen quite a lot of investment and acquisitions in recent years but until this year, there was little interest in going public. In contrast, biotech companies accounted for the majority of IPOs in 2018. There are a few reasons for that. Biotech stocks have attracted a broader audience, pharma companies are becoming more sophisticated partners for biotech businesses and big pharma companies have to be more capital-efficient. In the biopharma sector, the government shutdown, which started December 22 and lasted through January 25, delayed the IPOs of at least a few companies, such as Gossamer Bio. Gossamer and Alector stand out for their unicorn status. Gossamer, which was only founded in two years ago, also reflects the wider trend of young biotech startups increasingly going public earlier than they used to. Perhaps the contrast between the digital health and biotech sectors is striking because of how we tend to think of IPOs. Although they are not the exit they used to be, for biotech companies they are simply one step in the journey to commercialization. Most of the biotech companies that have gone public in recent years aren’t even generating revenue. In this eBook, we highlight some of the more interesting companies to go public this year and identify some of the trends fueling these deals across health tech and medtech. 2 Alector, developing immunity-based neurological disease drugs, goes public Feb 7, 2019 | Alaric DeArment A company developing drugs for neurological diseases Drug Administration in August 2018 and initiated the expects to raise $176 million in its initial public offering . Phase I study of it in September, followed by the Phase I AL002 study in November . South San Francisco, California-based Alector said that it would offer 9 .25 million shares to the public at $19 per Alector’s approach is based on immuno-neurology . share . The offering is expected to close Monday, and Under the current therapeutic approach, particularly the company started trading on the Nasdaq February 7 for Alzheimer’s disease, therapies only target either under the ticker symbol “ALEC ”. Tau tangles or amyloid beta aggregates . By contrast, Alector’s programs are designed to leverage the body’s The company filed to go public last month, with a own innate immune cells, the microglia, to counteract proposed maximum aggregate offering price of $150 multiple pathologies simultaneously . million, according to its form S-1 filing with the Securities and Exchange Commission . Morgan Stanley, BofA The IPO follows the more than month-long government Merrill Lynch, Cowen and Barclays are acting as joint shutdown that many had feared would put a damper book-running managers for the offering . on the ability of companies, particularly biopharma companies, to go public . One, San Diego-based The company has four product candidates in preclinical Gossamer Bio, initially said it would allow its IPO to and clinical development . AL001 and AL002 are take effect automatically during the shutdown, without in Phase I studies for frontotemporal dementia SEC signing off, using a workaround that the agency and Alzheimer’s disease, respectively, while AL101 had said would be allowed . However, the workaround and AL003 are respectively in development for an was viewed as being fraught with legal risks . When unspecified area of neurology and Alzheimer’s . AL002 the shutdown ended, the company changed course, and AL003 are partnered with AbbVie . The company saying it would seek an acceleration of the registration received orphan drug designation from the Food and statement’s effective date from the SEC . 3 Gossamer Bio becomes 2019’s second biotech ‘unicorn’ to go public Feb 8, 2019 | Alaric DeArment A company that initially sought to go public during Securities and Exchange Commission from signing off the government shutdown without the Securities and on IPOs . Consequently, the company sought to use the Exchange Commission signing off has announced the so-called 20-day rule, a legal workaround permitted pricing of its initial public offering . by the SEC whereby that filed to go public could alter the language in their filings to make the IPOs automatic San Diego-based Gossamer Bio said that it would after 20 days . While permitted by SEC regulations, offer $17 .25 million shares at $16 per share, with the the workaround carried potential legal risks as well . expectation that it would raise $276 million . The offering However, with the shutdown ended, Gossamer went is expected to close Tuesday . BofA Merrill Lynch, SVB back on that plan and chose to issue its offering through Leerink, Barclays and Evercore ISI are acting as book- the ordinary route . running managers . The company will trade on the Nasdaq under the ticker symbol “GOSS ”. Gossamer currently has three drug candidates in clinical development . GB001 is a DP2 antagonist in a Phase IIb Gossamer is the second “unicorn” – a company with a study for moderate to severe eosinophilic asthma, and value of at least $1 billion – to go public this year . The with Phase II studies planned in chronic rhinosinusitis first was Alector, which also announced Thursday that with nasal polyps and chronic spontaneous urticaria . it would go public . According to Renaissance Capital, GB002 is a PDGF receptor kinase inhibitor in Phase I Gossamer’s value would be $1 billion, while Alector’s development for pulmonary arterial hypertension, while would be $1 4. billion . GB004 is a HIF-1a stabilizer in Phase I development for inflammatory bowel disease . GB1275 is a CD11b Gossamer initially filed to go public in December, agonist in an unspecified preclinical program, while the but the government shutdown – which lasted for 35 company also has preclinical and research programs in days, from Dec . 22, 2018 to Jan . 25 – prevented the autoimmune disease and oncology . 4 BridgeBio files for $225M initial public offering May 28, 2019 | Alaric DeArment A company that turns research in genetically driven Other programs the company has in its pipeline diseases into subsidiary companies has filed to go public . include Adrenas’ BBP-631 and Aspa’s BBP-812, both gene therapies currently in preclinical development, Palo Alto, California-based BridgeBio Pharma said respectively for congenital adrenal hyperplasia and Friday that it had filed a Form S-1 with the Securities and Canavan disease . Another company in BridgeBio’s Exchange Commission for the proposed $225 million portfolio is TheRas, which is developing the preclinical initial public offering . The company would trade on the BBP-454, for KRAS-mutant cancers . Despite being widely Nasdaq under the ticker symbol BBIO . The company expressed by solid tumors, KRAS mutations have long closed a $299 .2 million financing round in January . been considered undruggable due to the protein’s lack of suitable pockets for drugs to target . But this weekend, The company was formed in 2015 and adopted a model biotech company Amgen will present early data on AMG developed at the Massachusetts Institute of Technology’s 510, a small-molecule inhibitor of a particular type of KRAS Sloan School of Management, whereby it identifies drugs mutation that has shown signs of efficacy in some patients . to treat genetic diseases and also cancers that have clear genetic drivers and then turns them into subsidiaries A company with a similar business model is Cambridge, to develop them further . The pipeline includes more Massachusetts-based ElevateBio, which launched earlier than a dozen development programs, spread across a this month with a $150 million Series A funding round roughly equal number of subsidiaries, ranging from small- and is focused on cell and gene therapies . ElevateBio molecule drugs in areas like KRAS-mutated cancers to recently named AlloVir as its first portfolio company . gene therapies for inherited diseases . AlloVir is developing cell therapies to treat viral infections in patients with compromised immune systems . One of BridgeBio’s portfolio companies, Eidos Therapeutics, went public last year and trades on the Nasdaq . The company, which is developing the drug BBP-265 for transthyretin amyloid cardiomyopathy, or ATTR-CM, currently has a market cap of more than $1 1. billion . Earlier this month, the FDA approved a Pfizer drug in two formulations for ATTR-CM, Vyndaqel (tafamidis meglumine) and Vyndamax (tafamidis) . 5 Nashville-based Change Healthcare files for $100 million IPO Mar 22, 2019 | Kevin Truong The company is currently owned by a joint

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