Drug Developers Slide in Trading Debut

Shares of drug developers Proteostasis Therapeutics Inc. and AveXis Inc. fell sharply on their first day of trading, highlighting the difficulty initial public offerings have faced this year.

Proteostasis and AveXis are only the third and fourth IPOs since Dec. 17. There were no U.S. IPOs in January, the first monthlong drought since September 2011, as volatile trading rocked global markets. All four offerings have now broken their IPO prices.

At Cambridge, Mass.-based Proteostasis, shares declined 31% to $5.50. In the offering, 6.25 million shares priced at $8 a share. The company had previously indicated it intended to sell 3.85 million shares at $12 to $14 each.

Meanwhile, AveXis, which is focused on developing treatments for patients with neurological genetic diseases, declined 15% to $17 a share, after its offering of 4.75 million shares priced at $20 each, the middle of its expected range.

Proteostasis, which is trading under the symbol PTI, has five drugs in its pipeline. Its lead product candidate, PTI-428, is in early-stage development; the company hasn't yet won regulatory approval for any of its treatments. Proteostasis said it would use IPO proceeds to advance PTI-428 as a treatment for cystic fibrosis into early and midstage clinical trials.

AveXis, which is trading on Nasdaq under the symbol AVXS, has one product candidate currently in development and said it intends to use IPO proceeds to fund early-stage trials of the drug AVXS-101.

The IPO slowdown, in particularly the biotech sector, is getting special scrutiny from investors because the sector is widely viewed as the most vulnerable to diminishing access to public funding.

For the year so far, the Dow industrials and S&P 500 have fallen 11%. The Nasdaq Biotechnology Index is off 28%.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

February 11, 2016 12:55 ET (17:55 GMT)

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