(Reuters) – Maplight Therapeutics went public on the Nasdaq on Monday, achieving a valuation of $787 million. This marked the first IPO under a seldom-used regulatory guideline following the U.S. government shutdown.
The Redwood City, California-based company, which focuses on treatments for central nervous system disorders, saw its shares open at $19 each—almost 12% higher than the initial price of $17.
Due to the ongoing government shutdown and the closure of the U.S. Securities and Exchange Commission, several companies utilized a rule that allows registration statements to take effect automatically 20 days after submission without awaiting regulatory approval.
With support from Novo Holdings, which is the main shareholder of Novo Nordisk, Maplight sold 14.75 million shares during its IPO, raising around $250.8 million. Additionally, Goldman Sachs acquired 476,707 shares in a private placement concurrently.
The company’s primary experimental drug, ML-007C-MA, is in mid-stage trials aimed at addressing hallucinations and delusions associated with schizophrenia and Alzheimer’s disease.
After a lengthy lull, biotech IPOs are gradually resurfacing, though the sector has faced hurdles due to regulatory ambiguity and disappointing returns, which have kept many potential issuers at bay.
LB Pharmaceuticals, which went public last month, was the first U.S. biotech firm to generate over $50 million in an IPO since February. Drug developer EvoMune is also set to pursue an IPO next month.
“The biotech IPO market is slowly improving, but it’s still challenged by numerous companies trading below their offering prices from 2021 to 2023,” noted Lucas Muhlbauer, an IPOX Research Associate.
“This tough environment makes it particularly hard for early clinical-stage companies to attract investors looking for late-stage data to validate their concepts.”
Optimism regarding potential rate cuts by the U.S. Federal Reserve has also fostered positive sentiment, as the S&P Biotechnology ETF has risen over 20% since the beginning of the year.
