Kardigan surges in Nasdaq debut after upsized $400mn IPO
Kardigan (KARD) shares surged 31 per cent above their initial public offering price after the heart drug developer raised $400mn in an upsized US initial public offering, in a sign of strong investor appetite for new biotech listings.
The Princeton, New Jersey-based company's shares opened at $16.25, above the IPO price of $16, and were last up 22.3 per cent.
The strong market debut underscores renewed investor appetite for biotech companies with advanced clinical programs and promising drug pipelines, as improving market conditions reopen the IPO window for the sector.
Lukas Muehlbauer, research associate at IPOX, said the market had recovered lately, with proceeds already substantially ahead of last year's levels. He added that the current environment was not a return to the "free-for-all" of 2020-2021, when many companies going public were still at very early or pre-clinical stages.
The clinical-stage biotech Kardigan is developing precision medicines for cardiovascular diseases and is advancing three late-stage experimental therapies: danicamtiv, ataciguat and tonlamarsen.
Tassos Gianakakos, chief executive, said going public gave the company access to long-term investors who believed in its mission, along with the capital to see that mission through for companies solving problems such as cardiovascular disease. He added that important data from all of its programs would be available in the first half of next year, which the company believes will unlock significant value.
Gianakakos and Jay Edelberg, chief medical officer, founded Kardigan after helping develop the heart drug mavacamten at MyoKardia, which Bristol Myers Squibb (BMY) acquired for $13bn in 2020.
Muehlbauer said Kardigan's disclosure that it would not have cash reserves to fund operations for at least 12 months explained the timing of the raise. He added that investors may nonetheless watch for potential follow-on offerings as an overhang, particularly since the company has said it may seek additional capital should market conditions remain favorable.