Neumora seeks to become the second Massachusetts biotech to go public in 2023 – The Boston Globe

Neumora seeks to become the second Massachusetts biotech to go public in 2023 - The Boston Globe

Neumora’s stock sale, if successful, could leave it with a market value of as much as $2.7 billion. Its shares are expected to begin trading on the Nasdaq under the symbol NMRA by the end of the week.

Executives at Neumora declined to discuss their IPO bid Monday, citing a “quiet period” imposed by the Securities and Exchange Commission in the run-up and immediate aftermath of stock offerings.

The company’s IPO will be closely watched in the biopharma industry and beyond as an indication of whether investor appetite is starting to pick up for risky startups with big potential payoffs.

An industry snapshot released last week by the Massachusetts Biotechnology Council, a trade group, showed a mixed picture. The state’s biopharma workforce expanded last year even as venture capital investment slowed and fewer companies went public. Only eight state biotechs executed IPOs in 2022, down from 25 in 2021.

No biotechs in the state went public in the first half of this year, but that may be changing. Ben Bradford, head of external affairs for MassBIO, cited improved economic conditions, including the leveling off of interest rates after a year of rapid increases, and a sense that science is advancing broadly in drug discovery.

“My hope is to see things loosening up a bit for IPOs,” said Bradford. “If Neumora is successful, it would not surprise me to see other [biopharma] companies follow in their footsteps.”

Apogee Therapeutics, a Waltham biotech, raised $345 million in July after a long IPO dry spell. Outside the biotech arena, Boston-based technology marketing startup Klaviyo has also disclosed plans to go public, without specifying the size or timing of its offering.

Nationally, the number of IPOs peaked in 2021, with 397 companies raising $142 billion, according to Renaissance Capital, a Connecticut research firm focusing on stock offerings.

Last year, by comparison, 71 companies went public, raising $4.6 billion. The money raised in 2023 has already topped last year’s pace, with 70 stock sales generating $9.9 billion, but still remains well below average. A growing number of venture-backed startups are expected to test the IPO waters in the coming months.

“If the stock market cooperates, we expect to see acceleration going into 2024,” said Matt Kennedy, senior market strategist for Renaissance.

Thirteen biopharma companies have gone public on the Nasdaq so far this year, compared with 22 last year, according to data from the exchange.

An opening for Neumora was cleared last month when the Food and Drug Administration approved the first pill designed to treat postpartum depression, a drug developed by Cambridge biotechs Sage Therapeutics and Biogen. But the FDA rejected the pill’s use to treat major depressive disorder, a far more prevalent condition marked by persistent feelings of sadness that impair daily life.

Neumora in July said its drug candidate navacaprant showed meaningful benefits in a mid-stage clinical trial for patients suffering from major depressive disorder. The experimental drug is moving into its final stage of testing for what could be a large and profitable market.

Founded in 2019 by Arch Venture Partners of Chicago, Neumora came out of stealth mode in 2021 promising to bring precision medicine, used mostly in cancer treatments, to neurodegenerative and neuropsychiatric disorders, including depression and other brain diseases. It has seven drug programs in clinical and pre-clinical development.

The company has drawn big cash infusions from SoftBank and Amgen, which made a $100 million investment that gives it rights to sell several of Neumora’s experimental drugs in global markets. The company in July named Henry Gosebruch, who was chief strategy officer for drug giant AbbVie, as its chief executive.

Robert Weisman can be reached at [email protected].

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