San Diego-based Gossamer Bio is pulling the trigger on an initial public offering by harnessing a legal loophole that will allow the company to move forward with its listing plans despite the partial government shutdown, now in its 34th day.
San Diego-based Gossamer Bio is pulling the trigger on an initial public offering by harnessing a legal loophole that will allow the company to move forward with its listing plans despite the partial government shutdown, now in its 34th day.
Late Thursday, Gossamer Bio, which launched last year with $100 million in financing, said it filed an S-1 registration statement with the U.S. Securities and Exchange Commission – one of the government bodies that has been severely hampered by the shutdown. In its announcement, Gossamer said it will offer 14,375,000 shares of its common stock at an initial public offering price of $16 per share. Additionally, Gossamer said it will grant underwriters a 30-day option to purchase up to an additional 2,156,250 shares of common stock. All told, that would allow Gossamer to raise $264.5 million from the IPO.
In order to get around the IPO delays caused by the shutdown, Gossamer will use a rule that will allow the company to change some of the wording to skip a review by the SEC, announce its IPO price and wait 20 days. Then the listing will be fixed at that price and the stock can be publicly traded. In Gossamer’s case, trading on the Nasdaq will begin Feb. 12. However, Gossamer did note that if the shutdown is resolved before that Feb. 12 trading deadline, the company will re-evaluate the use of this option in connection to its IPO – possibly due to potential disputes when the government reopens.
BofA Merrill Lynch, SVB Leerink, Barclays and Evercore ISI are acting as joint book-running managers, the company said.
Gossamer Bio initially announced its intentions to file for an IPO in December 2018, ahead of the government shutdown. The company focuses on immunology, inflammation, immuno-oncology and fibrosis.
For Gossamer, 2018 was certainly a breakout year. Not only did it launch in January, but the company also tapped a new chief executive officer, co-founder Sheila Gujrathi, forged a $420 million developmental agreement with Aerpio Therapeutics and closed a $230 million Series B funding round.
Gossamer has several assets in its pipeline, including GB001, a DP2 antagonist being developed for eosinophilic asthma, a difficult-to-manage type of the disease. In addition to eosinophilic asthma, Gossamer is studying GB001 as a potential treatment for both chronic rhinosinusitis with nasal polyps and chronic spontaneous urticaria. Phase II programs are planned for both later indications, while a Phase IIb is currently underway for eosinophilic asthma.
Another asset, GB004 was the result of the deal with Aerpio. GB004 is an HIF-1 alpha stabilizer being investigated as a potential therapy for inflammatory bowel disease. When it struck the deal with Aerpio, Gossamer said GB004 had “profound anti-inflammatory and mucosal wound healing effects” in animal models and “preferentially” stabilizes HIF-1 alpha.
Since the partial government shutdown went into effect, biotech IPOs have slowed considerably from the fast-paced action of 2018. Last year was a record year for pharma IPOs, with about &8.2 billion raised. If the IPO does move forward under the current pathway, Gossamer will trade on the Nasdaq under the ticker symbol GOSS.
