One of the hottest recent biotech initial public offerings belongs to Third Harmonic (NASDAQ:THRD). Today, this early stage biotech company focused on developing a drug for allergic and inflammatory diseases went public. At the time of writing, THRD stock is trading 17% higher, as investor demand for this company appears high.
Initially listed at $17 a share, THRD stock now trades at the $20 level. This sort of move may have been unexpected given it is another down day for the Nasdaq. That said, there are some positive signs emerging for the biotech sector, driving interest in this space.
Overall, Biotech valuations remain muted, providing for M&A opportunities in this space. Should more acquisitions occur, investors could start bidding up smaller-capitalization companies like Third Harmonic.
Additionally, this is a company with a strong roadmap to drug approval.
Let’s dive into some details of this IPO and what investors may want to know.
THRD Stock Surges on Hot IPO
The $17 listing price for THRD stock provided the company with $185 million in financing. It sold 10.9 million shares to investors, who appear to have gobbled them up in higher demand than initially thought.
Notably, this initial public offering is one of the largest the biotech sector has seen this year. Deal sizes have shrunk, as easy liquidity in capital markets has dried up. Accordingly, as demand for more speculative biotech names has dwindled, so too has the number of companies looking to go public.
That said, Third Harmonic appears to believe that right now is the right time to go public. This company appears to intend on using these funds to engage in more clinical trials for its drug. While investors await more data, this company is starting off on solid footing.
Accordingly, the company appears to have priced this IPO correctly, with the company’s initial valuation of roughly $650 million already seeming to be a relative bargain.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.