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Hamilton’s Fusion Pharmaceuticals Inc. is set to start trading Friday on Nasdaq after setting its initial public offering price at US$17 a share amid strong investor demand.

That’s up from a range of US$14 to US$16 set by the company and its underwriters earlier this week.

With the proceeds from selling 12.5 million shares, plus an option for its underwriters to buy another 1.875 million at the issue price, the cancer drug developer could raise as much as US$244-million in gross proceeds from the deal, the company said late Thursday. That’s just shy of the US$253-million raised last week by Montreal’s Repare Therapeutics in what was the largest IPO by a Canadian biotech firm.

The funding sets Fusion’s market capitalization at more than US$700-million, an amount that could leap if the company’s stock follows the path of numerous other biotech stocks that have gone public on the U.S. exchange this spring and immediately spiked in value – including Repare, whose stock closed more than 50 per cent above its issue price on its first day of trading a week ago.

It also represents a windfall for the Canada Pension Plan Investment Board, which invested US$20-million this year for 2.47 million shares. At the issue price, CPPIB has more than doubled the value of its investment. Other early Canadian investors that stand to benefit include Toronto venture capital firm Genesys Capital and the Fight Against Cancer Innovation Trust, a body mandated to commercialize breakthrough research from the publicly funded Ontario Institute for Cancer Research.

Fusion said Monday it planned to sell 8.35 million shares at US$14 to US$16 apiece, plus an option for its four U.S. underwriters to buy 1.25 million more at the issue price. On Wednesday, it increased the number of shares it planned to sell by about 50 per cent.

This has been a strong quarter for biotechnology IPOs amid heightened investor interest for drug developers seen as immune from the impact of the COVID-19 pandemic, investment bank Renaissance Capital said in a report Wednesday. During the second quarter “nearly every IPO upsized or priced above the midpoint” of their target range and IPOs jumped in price by 39 per cent on average from their issue price, said Renaissance, which tracks IPO activity.

Fusion is one of several “precision oncology” startups that take a new approach to fighting cancer, with more targeted treatments than traditional approaches. Fusion acquires antibodies from other drug companies, then links them to radioactive particles to kill cancer cells.

It is conducting its first human trials for its lead product. Fusion was spun out in 2017 from McMaster University’s Centre for Probe Development and Commercialization, and is led by CPDC founder John Valliant.

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