Dive Brief:
- Turnstone Biologics has become the fourth biotechnology company to go public in the last week, announcing Thursday that it raised about $80 million in an initial public offering.
- The cell therapy startup sold 6,666,667 shares at $12 apiece in the offering, more than it had projected earlier this week. Takeda, a former partner and current Turnstone investor, indicated interest in acquiring $8 million in shares either in the IPO or a concurrent private funding deal.
- The offering provides a financial lifeline for Turnstone, which lost partnerships with Takeda and AbbVie in recent years and, in its IPO filing, warned it may not remain solvent without further funding. The company held $64 million in cash and short-term investments at the end of March, and needed about $71 million to run its business in 2022.
Dive Insight:
There hasn’t been much good news about biotech IPOs in the last year and a half, with the pace of new stock offerings dropping off substantially since a 2021 peak. But a recent flurry of activity over the last few weeks has provided some reason for optimism.
With Turnstone’s pricing on Thursday, four biotechs have now successfully gone public over a one-month period, the first time that’s happened since February 2022, according to BioPharma Dive data.
Three of the four — Apogee Therapeutics, Sagimet Biosciences and now Turnstone — have raised at least $80 million, sums that are more typical of historical industry norms. Apogee also outperformed expectations, bringing in $300 million in the sector’s fourth largest offering since the start of 2022.
Those numbers, if replicated in the months ahead, would represent a shift from the first half of the year, when the median size for new offerings was only $20 million. Any such change would boost a sector that’s been mired in a lengthy downturn that’s trickled down to startups, causing some to shut down because of a lack of funding.
Turnstone is only the fourth cell therapy developer since the start of 2022 to go public. Its offering is the most lucrative since the $192 million IPO of multiple myeloma cell therapy maker Arcellx.
The fresh funds will support the startup’s focus on “tumor-infiltrating lymphocyte,” or TIL, cell therapy research, which has drawn interest for years but hasn’t led to an approved drug.
Turnstone was initially formed in 2015 to develop oncolytic viruses as cancer therapies. It raised $172 million from private investors, among them Versant Ventures, to support the effort. But Turnstone changed course in 2020, acquiring a biotech developing TIL-based treatments, and later making those therapies its “foundational therapeutic modality,” according to its IPO filing. AbbVie and Takeda ended partnerships with the company in 2021 and 2022, respectively.
Its most advanced treatment, for solid tumors, is currently in two separate Phase 1 trials. Initial study results are expected in the middle of next year.