Tales of the demise of the initial public offering (high-profile IPO of Kenvue (NYSE:KVUE) — a Johnson & Johnson (NYSE:JNJ) spinoff — now has many investors eagerly anticipating more activity. In particular, one upcoming IPO many investors are watching is Acelyrin, which is expected to begin trading tomorrow. Investors will have the opportunity to buy SLRN stock for between $16 and $18 apiece. The company is looking to raise as much as $370 million from the offering at the top end of its range.) market appear to have been exaggerated. Today’s
One of the key reasons Acelyrin’s IPO is important to investors is that the IPO market has been very slow for biotech stocks, a group which typically needs to tap equity markets for financing. That said, with interest rates appearing to have flatlined for now, perhaps activity can pick up.
Many companies don’t want to go public during times of turmoil. Accordingly, the heightened volatility in markets has hampered demand for public offerings.
With that said, let’s dive into what investors can expect from this latest IPO.
Should Investors Get in Early on SLRN Stock?
Today’s initial price action in KVUE stock suggests that there’s appetite for new ideas in the market. While Kenvue is a very different business from Acelyrin, this investor appetite could bode well for the company’s IPO.
Acelyrin is looking to raise approximately $100 million from the offering according to its initial filing. How much of these funds will be put into further clinical development for its pipeline remains to be seen. However, the company does have a promising lead candidate drug called izokibep. Investors may also want to get in because of other pipeline candidates.
Initial trials are ongoing for izokibep, which hopes to provide an effective treatment for hidradenitis suppurativa (HS), psoriatic arthritis (PsA) and uveitis. Initial results appear to be positive. Still, more work will need to be done in order for the company to gain approval. Thus, like many biotech stocks, there’s plenty of drug-specific risk to factor in here.
That said, Acelyrin has been successful in raising money in the past. This suggests that its IPO could be over-subscribed, although we won’t officially know until tomorrow.
All told, I think this offering is certainly worth keeping an eye on. I’ll be putting SLRN stock on my own watch list in short order.
On the date of publication, Chris MacDonald did not hold (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.