Drug developer Lycia Therapeutics targets $938 million valuation in US IPO

Oct 20 — Drug developer Lycia Therapeutics said on Tuesday it was targeting a ​valuation of up to $937.7 million in its US initial public offering, as biotech companies flock to the IPO ‌market.

The South San Francisco, California-based company is seeking to raise up to $264.6 million ⁠in the IPO by offering ​14.7 million shares priced between $16 ⁠and $18 apiece.

The healthcare sector has anchored the fall IPO window ‌this year in ‌an otherwise lackluster market as investors become selective in a ⁠higher interest rate environment.

Drug developers ⁠City Therapeutics and Nvidia-backed Iambic Therapeutics went public in New York last week. Aspen Neuroscience and Bambusa Therapeutics also filed for US IPOs earlier this month.

"Smart investors pay attention to the lesser-known names as well. The recent filers tell ‌us Q4 will have more deals ​than just Anthropic," said Matt Kennedy, senior strategist at Renaissance Capital, a provider of IPO-focused research and ETFs.

"Some of these small and mid-cap names could be tomorrow's leaders."

Lycia, which was founded by Nobel Prize winner Carolyn Bertozzi, is developing drugs to treat autoimmune, inflammatory and allergic diseases.

Its experimental drug, ​LCA-0061, is being developed in an early-stage trial to treat patients ‌with food allergy.

The ‌firm has ⁠raised roughly $266.6 million from leading life sciences investors since its inception in 2019. Its major shareholders include Versant Ventures, Venrock Healthcare, Redmile Group, RTW Investments, Janus Henderson, and Blue Owl.

Jefferies, TD ‌Cowen, Evercore ISI, and ​Guggenheim Securities are joint book-running managers. ‌Lycia will list on ⁠the Nasdaq ​under the symbol "LYCA".

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by ​Devika Syamnath)

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