RayzeBio upsizes its offering, Neumora sticks to original plan in Friday IPO doubleheader

Two Phase III biotechs will join the Nasdaq Friday morning, with radiopharma startup RayzeBio and brain disease drug developer Neumora raising $311 million and $250 million, respectively.

RayzeBio and Neumora wooed investors during a relatively icy IPO market, which is beginning to thaw as other biotech startups are lining up to go public. The Friday doubleheader — the second of its kind in recent months after Apogee and Sagimet entered Wall Street on the same day in July — could be a boon to other private biotechs eager to go public this fall, which is anticipated to be about 10 companies, per industry insiders.

RayzeBio won over more investor support than initially expected, selling 16.1 million shares $RYZB versus an original plan to offload 13.2 million units of common stock, while another stockholder in RayzeBio is offering 1.16 million shares. It priced at $18, the high end of the range that it proposed earlier this week. Neumora, though, kept its offering at the same size as proposed earlier this week, selling 14.7 million shares $NMRA at the mid-point of $17 apiece.

RayzeBio is enrolling for a Phase III trial of RYZ101, its actinium-based radioligand drug for gastroenteropancreatic neuroendocrine tumors. It’s also building a manufacturing facility in Indiana and exploring the potential of RYZ101 and other candidates in various other tumor types.

It’ll be a while before Neumora’s biggest test. Topline results from the first of three Phase III trials in major depressive disorder are at least nine months out, per the company’s roadmap. Late-stage topline results can be a make-or-break moment in this environment.

Neumora had already won over ample investor support in the private markets. It reeled in more than $600 million from the likes of Amgen and SoftBank after ARCH Venture Partners catapulted the company into the spotlight two years ago, combining a suite of biotechs: BlackThorn Therapeutics, Syllable Life Sciences, Abelian Therapeutics, Propellex Bio and Alairion.

The IPO proceeds, on top of about $334 million still available at the end of June, will bankroll its operations for at least 30 months, Neumora said.

Henry Gosebruch

As a late-stage biotech, Neumora is viewed as a less risky bet than the preclinical-heavy days of the 2021 biotech IPO landscape. It also beefed up its leadership team in recent months, poaching ex-AbbVie strategy chief Henry Gosebruch as CEO in July and naming Amgen vet Rob Lenz as head of R&D.

Neumora’s Phase III trials will test a once-daily oral kappa-opioid receptor antagonist with the goal of securing a monotherapy label after heading to regulators in 2025. The idea is that hitting a system involved in stress will improve brain function in areas critical to motivation and reward, Neumora consultant and Baylor professor Sanjay Mathew previously told Endpoints News.

The KOASTAL studies will see if the investigational drug, dubbed navacaprant, can lessen patients’ depression as viewed from a measure known as the Montgomery-Asberg Depression Rating Scale. Another pharma working on a similar type of depression drug, Johnson & Johnson’s Janssen (soon to be Johnson & Johnson Innovative Medicine), is using the same scale in its Phase III trials, which are testing aticaprant as an adjunctive.

Neumora also plans to study navacaprant’s potential in people with bipolar depression with a trial in the first half of next year.

If navacaprant succeeds in the difficult R&D field of depression treatments, it could enter a market of 28 million people, Neumora estimates. It could also be a major boon to former BlackThorn stockholders, who could gain up to $365 million in development and regulatory milestones and up to $450 million in sales-based biobucks.

Also on the docket are programs licensed from Neumora’s biggest investor, Amgen, including preclinical-stage assets for Parkinson’s and ALS.

A Phase I is underway for a V1aR antagonist named NMRA-511, which is expected to be studied in people with agitation in Alzheimer’s disease in 2024. Neumora also plans to ask the FDA for clinical trial clearance for an investigational schizophrenia drug by year’s end. It hopes to differentiate itself from Karuna Therapeutics, which could launch a new type of schizophrenia medicine by the time Neumora makes it into late-stage testing.

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