Cullinan Management and Gracell Biotechnologies are 2021’s First Biotech IPOs

Cullinan Management Inc. and Gracell Biotechnologies, two biotech IPOs that focus on cancer research and developing new oncology treatments, set their terms and are set to start trading on January 8. These deals could generate up to $300 million, continuing a 2020 trend that saw high demand for biotechs.

Cullinan Management is a Cambridge, MA-based biopharma that launched in 2016 and specializes in targeted oncology and immuno-oncology therapies.

The company raised approximately $250 million after expanding its planned offer from 8.3 million shares priced at $17 to $19, to 10 million shares priced at $19 to $20 earlier this week. As a result, the biopharma company would emerge with an estimated fully diluted market value of $750 million, according to Renaissance Capital. Cullinan will trade on the Nasdaq under the ticker symbol CGEM.

Cullinan’s leading product is a small oral molecule called CLN-081, a next generation, irreversible EGFR inhibitor that works by selectively targeting cells that express mutant epidermal growth factor receptor (EGFR) variants. The variants targeted by this molecule include EGFR exon 20 insertion or EGFRex20ins mutations, which can be present in non-small cell lung cancer (NSCLC). CLN-081 is undergoing phase I/IIa clinical trials for dose escalation and expansion in order to establish the maximum tolerated dose for the drug. It is currently being evaluated for twice-daily oral administration in patients with NSCLC with EGFRex20ins mutations who have already undergone at least one previous platinum-based chemotherapy or a different approved therapy.

Cullinan is also currently developing other immuno-oncology products, including CLN-049, a bispecific antibody that targets FLT3 and CD3 meant to treat patients with acute myeloid leukemia. It’s also developing CLN-619, a monoclonal antibody designed to stimulate NK and T-cell responses by engaging MICA/B, which are cell surface glycoproteins that have been found to be expressed by most tumor types.

Similarly to other biotechs, Cullinan isn’t profitable and has reported losses in previous years. The company’s losses increased to $30.4 million in the first nine months of 2020, up from $17 million losses in the same time frame in 2019.

Gracell Biotechnologies Inc. is another biotech that focuses on the development of innovative clinical-stage cancer cell therapies.

The Shanghai-based biotech raised $209 million by selling 11 million American depositary shares priced at $19 each; the offer was raised from an initial 8.825 million ADS priced at $16 to $18 each. The company also granted underwriters the possibility of a 30-day option to purchase 1.65 million more shares at IPO price. Gracell’s shares are set to begin trading on the Nasdaq under the ticker symbol “GRCL”.

Gracell develops groundbreaking cell therapies with the aim of fulfilling unmet needs in the field of cancer treatment. The company is currently developing a pipeline of autologous and allogeneic product candidates to address treatment gaps that affect traditional CAR-T therapies. Its leading products include GC-012F, a FasTCAR-enabled dual-targeting BCMA/CD19 cell therapy designed to treat patients with refractory or relapsed multiple myeloma. The company is also developing an allogeneic product candidate called GC-027 for relapsed or refractory T cell acute lymphoblastic leukemia. Both products are currently undergoing phase I trials in China, and each has achieved multiple responses.

Cullinan and Gracell’s IPOs are expected to continue the 2020 trend that saw biotech IPOs break their own market performance records. In 2020, biotech IPOs raised a total of $22.6 billion, which represented a marked increase from the $10.7 billion record set in 2018.