Lilly backs Veradermics' upsized US$256.3m IPO
Veradermics raised an upsized US$256.3m late Tuesday from its Nasdaq IPO, an offering that included participation from Eli Lilly.
Jefferies, Leerink Partners, Citigroup and Cantor acted as joint bookrunners on the pricing of 15.1m shares at US$17.00, one dollar above the high end of the US$14–$16 marketing range and an increase from the 13.5m shares originally planned.
The banks had communicated pricing was likely to come at the “high end or above” and advised investors to “manage expectations”, reflecting a book of demand that was multiple times oversubscribed.
Lilly disclosed its intention to take a 4.9% stake in a securities filing Tuesday morning. That commitment came on top of a US$30m anchor order from Wellington Capital Management.
“(A strategic investment) is not always about product access,” a veteran healthcare ECM banker told IFR. “It can also be about getting a preferred seat at the negotiating table during M&A talks.”
Veradermics sold 41.8% of itself in the offering, implying Lilly and Wellington collectively purchased roughly 3.5m shares, or more than 20% of the offering. That assumes their orders were fully accepted and excludes additional shares sold through the greenshoe option.
The late-stage hair loss drug developer will debut on Nasdaq Wednesday under the ticker “MANE”.
Veradermics is running a Phase III trial for an oral, extended-release formulation of minoxidil to treat hair loss, with initial results expected in the second half of this year.
Topical minoxidil -- the active ingredient in Rogaine -- is widely available in generic form and generates US$1.6bn in annual global sales. While the FDA has approved oral formulations of minoxidil for hypertension, those formulations are very potent and considered unsafe for hair-loss treatment.
Lilly's investment is purely strategic as the drugmaker has no clinical partnership with Veradermics.
Separately, Merck is planning to invest in the US$317.7m Nasdaq IPO of cancer drug developer Eikon Therapeutics, bankers involved in that process told IFR. That offering is scheduled to price after the market close Wednesday for a Thursday debut.