Kardigan’s IPO haul has come in 14% above expectations, grossing $400 million after the cardiovascular disease biotech upsized the offering and hit the top end of its target range.
Last week, Kardigan set out plans to offer 23.3 million shares priced between $14 and $16. At the midpoint of the range, the planned offering would have generated $349.5 million. Kardigan upsized the offering ahead of its Nasdaq debut on Friday. In the end, the biotech sold 25 million shares for $16 each to generate gross proceeds of $400 million.
Kardigan also upsized its overallotment. Having initially planned to offer an additional 3.5 million shares, the biotech bumped the overallotment up to 3.75 million shares late on Thursday. At $16 a share, the overallotment could gross a further $60 million for Kardigan if underwriters take up their full option in the next 30 days.
With Kardigan sitting on $287.1 million at the end of March, the bumper IPO haul will position the biotech to advance three assets into phase 3. Before upsizing its offering, the company allocated $80 million to $90 million each to deanicamtiv and ataciguat, plus $40 million to $50 million to tonlamarsen. For each asset, the money is intended to enable Kardigan to deliver phase 2b data and start phase 3 development.
The Prolaio platform is a key element of Kardigan’s clinical development strategy. Kardigan, which bought the platform last year, is betting that Prolaio capabilities such as artificial intelligence-enabled tools will improve patient identification and enrollment while supporting continuous real-world data collection. If the platform lives up to expectations, Kardigan could pay up to $200 million in milestones to former Prolaio investors.
Digital clinical endpoints are among the features Kardigan envisages for Prolaio. However, the biotech warned IPO investors that the FDA may not accept digital clinical endpoints collected through its Prolaio platform, necessitating additional validation work, modification of trial design or collection of additional clinical endpoint data. The additional work could delay development timelines, Kardigan said.
Kardigan will use Prolaio data collection in the post-discharge period of its phase 2 trial of tonlamarsen, an antisense oligonucleotide, in acute severe hypertension. The biotech plans to use the platform to characterize blood pressure control, blood pressure excursions and cardiovascular parameters.
The Kardigan IPO adds to a steady stream of recent biotech offerings, including Parabilis’ record-breaking $670 million haul and Kailera’s $625 million market debut before that.
