AbCellera Biologics Inc. has closed the biggest ever initial public offering by a Canadian biotechnology company after its underwriters exercised their option to buy 3.62-million shares at the US$20 offering price.
The Vancouver antibody developer – a key player in the fight against COVID-19 - said late Tuesday it had raised US$555.5-million in gross proceeds, more than double the prior record for a Canadian biotech IPO, by Montreal’s Repare Therapeutics Inc. in June.
The AbCellera offering had one of the biggest debuts of the year for any North American stock when it began trading Friday on the Nasdaq Stock Market, nearly tripling to close at US$58.90. It has since eased off, closing Tuesday at US$46.99 a share. That’s still well above its issue price and leaves the company with a market capitalization of $12.65-billion, more than the combined value of all other Canadian-based publicly traded biotech companies. It’s also up more than 30-fold from AbCellera’s valuation in a private financing in March.
The IPO was underwritten by Credit Suisse, Stifel Nicolaus, Berenberg Capital Markets, SVB Leerink and Canada’s BMO Capital Markets, who earned a combined US$29.1-million in underwriting discounts and commissions. The offering was 20 times oversubscribed and had big-name investor support pre-IPO, including Silicon Valley billionaire investor and AbCellera board member Peter Thiel, and top biotech investors DCVC Bio, Viking Global Investors and OrbiMed. L.A. fund giant Capital World Investors said it would buy 20 per cent of the IPO.
AbCellera’s IPO caps a year in which Canada’s biotech sector has set records for public and private funding. In May, it partnered with drug giant Eli Lilly and Co. to produce an antibody-based drug for COVID-19 patients called bamlanivimab. U.S. and Canadian regulators authorized the treatment in November for emergency use, and their governments have ordered 950,000 and 26,000 doses respectively.
Its platform can continuously spin out antibody treatments for an array of ailments. AbCellera has partnered with drug makers on 94 drug-discovery programs, signing 71 deals in which it will earn research fees, milestone payments and eventually royalties as molecules advance from the lab to the market. AbCellera has more than doubled revenues annually, on average, since 2014, bringing in US$25.2-million during the first nine months of this year and generating a US$1.9-million profit, it said in its prospectus.
AbCellera was spun out in 2012 from the University of British Columbia’s interdisciplinary Michael Smith Laboratories, where Dr. Hansen ran the bioengineering group. Using technology developed at the lab, AbCellera speeds up the process of isolating and identifying antibodies that humans create to fight infections. Its “antibody discovery engine” passes blood samples from a person who has developed an immunity to a disease through a credit-card-sized device with hundreds of thousands of tiny chambers. With the help of artificial intelligence, it tests antibodies produced by cells in each chamber simultaneously, to determine which have potential to become drugs.
The company has received funding from the US defence department, the Canadian government and the Bill and Melinda Gates Foundation.