Preclinical Metagenomi Tests Surging Biotech IPO Market with Near $94M Offering

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Pictured: Wall Street sign in New York City/iStock, stu99

Despite not having a single candidate in the clinic, Metagenomi is hoping investors will bet on their metagenomics-derived gene editing. The California-based biotech is offering an initial 6.25 million shares Friday on the Nasdaq Global Select Market at $15 apiece for an expected raise of almost $93.8 million. 

After a surge of preclinical biotech IPOs in 2020 and 2021, many ended up falling off in the market downturn of the last two years. Investors became wary and relied on more established pipelines with assets in advanced clinical stages. According to BioPharma Dive, this is the fourth IPO of significant size for a preclinical biotech since October 2022. 

Metagenomi is hoping its technology will be more attractive to investors than its lack of a clinical-stage pipeline, with backers like Moderna, Bayer, Novo Holdings and RA Capital, among others. In early 2023, a Series B extension led by Moderna and Bayer brought in $275 million.  

Friday’s IPO is priced at the lower end of its range of between $15 and $17 per share. Metagenomi is targeting a valuation of $563 million. The stock will be listed under the Nasdaq ticker symbol MGX and the IPO is set to close Tuesday. 

In addition to the funds raised in the IPO, the biotech also has a cash balance of around $293 million. Funds are expected to last until 2027, as $125 million is funneled into pre-clinical R&D and $85 million goes toward two IND filings.  

The company’s metagenomics genome editing tools will be utilized for both in vivo and ex vivo approaches. The preclinical pipeline includes assets for a range of cardiac, neuro, respiratory and oncology assets. It has partner programs with Moderna, Ionis and Affini-T Therapeutics. 

With gene editing therapies on the rise after the FDA approval of Vertex-CRISPR Therapeutics’ Casgevy, rising companies like Metagenomi are hoping their toolboxes can address some of the shortcomings of CRISPR. The biotech’s platform identified microbial DNA to discover new enzymes capable of editing genes. 

Metagenomi isn’t the only preclinical biotech dipping its toe into tepid market waters. Telomir Pharmaceuticals also announced an IPO for a more modest figure. The company is offering a million shares at $7 apiece for expected proceeds of $7 million. The funds will fuel the development of its small molecule drug designed to lengthen the DNA’s protective telomere caps to affect age reversal. The drug is being developed for age-related inflammatory conditions. 

2024 has started off fairly hot for initial public offerings after a significant cooling of IPOs in 2022 and 2023. Five other biotechs have gone public so far this year—Alto Neuroscience, ArriVent Biopharma, CG Oncology, Fractyl Health and Kyverna Therapeutics. 

Kate Goodwin is a freelance life science writer based in Des Moines, Iowa. She can be reached at kate.goodwin@biospace.com and on LinkedIn.   

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