RayzeBio and Neumora Therapeutics have joined the public markets, and in contrast to the plethora of preclinical biotech IPOs of 2020 and 2021, these two Wall Street newcomers each have multiple drug candidates in the clinic. That clinical trial progress, including lead programs in Phase 3 testing, enticed investors, enabling both companies to meet or beat their financing goals.

The RayzeBio IPO was the larger of the two, and the company was able to offer more shares than planned, boosting its total haul to $311 million. The San Diego-based company late Thursday priced its offering of 16.1 million shares at $18 apiece, which was the top of its targeted price range. On Monday, RayzeBio had set preliminary financial terms, aiming to offer 13.2 million shares in the range of $16 and $18 apiece. RayzeBio shares began trading Friday on the Nasdaq under the stock symbol “RYZB.”

RayzeBio develops radiopharmaceuticals and its IPO comes as the field of targeted radiation cancer therapies sees a surge of progress. Novartis blazed a trail in radiopharmaceuticals with the 2018 FDA approval of Lutathera for gastroenteropancreatic neuroendocrine tumors (GEP-NETs), a type of gut cancer. Last year, the FDA approved Novartis radiopharmaceutical Pluvicto in prostate cancer. Big pharma companies and startups are following with new approaches to radiopharmaceuticals. The field is also attracting investor interest. Last week, Mariana Oncology closed $175 million in Series B financing. The radiopharmaceuticals startup launched two years ago, known at the time as Curie Therapeutics.

RayzeBio’s lead program, RYZ101, is a potential treatment option for patients whose GEP-NETs progresses after treatment with Novartis’s Lutathera. The Novartis therapy kills cancer cells by emitting beta particle radiation. The experimental RayzeBio therapy is a targeted radiopharmaceutical that kills tumors with actinium-225, a potent alpha emitter. In the IPO filing, RayzeBio says the alpha particles deliver up to 400 times higher energy compared with beta particles, making them more lethal to cancer cells.

“While most patients experience initial disease control, patients will invariably progress following treatment with Lutathera and most continue to live for at least two years,” the company said in the filing. “Following disease progression, there are no approved treatments nor recommendations in professional society treatment guidelines. RYZ101 has the potential to address the unmet need in patients with GEP-NETs following [Lutathera] treatment.”

A Phase 3 test of the RayzeBio therapy began dosing patients in May. A separate clinical program is evaluating RYZ101 in extensive stage small cell lung cancer.

The RayzeBio IPO comes a year after the biotech closed $160 million in Series D financing, bringing its total funding haul to $418 million raised since its 2020 inception. According to the IPO filing, Viking Global Investors is RayzeBio’s largest shareholder with a 9.5% post-IPO stake. Versant Ventures and venBio each hold 9.3% post-IPO stakes.

As of the end of June, RayzeBio reported a cash position of $256.9 million. That capital and the IPO proceeds will support the pipeline. RayzeBio plans to spend $65 million to $75 million to continue Phase 3 testing of RYZ101 through the reporting of preliminary Phase 3 data in GEP-NETs. Another $8 million to $10 million is planned for advancing the therapy through Phase 1b testing in small cell lung cancer. RayzeBio expects this study will yield initial safety data in the second half of next year followed by initial efficacy data in the second half of 2025.

RayzeBio has additional programs for hepatocellular carcinoma. Between $20 million and $25 million is set aside for RYZ801 and RYZ811, advancing both programs in this type of liver cancer through the reporting of Phase 1b safety data. The company expects to file investigational new drug applications for both in the first half of 2024, according to the filing. RayzeBio is also building the infrastructure for producing its radiopharmaceuticals. The company has budgeted about $40 million for completing construction of a manufacturing facility in Indianapolis.

Neumora’s $250M IPO Haul Supports Novel Depression Drug

Neumora Therapeutics is trying to set itself apart in the treatment of brain diseases. The biotech raised $250 million as it continues pivotal testing of a drug that offers a novel approach to major depressive disorder. Watertown, Massachusetts-based Neumora late Thursday priced 14.7 million shares at $17 each, which was the midpoint of its targeted price range of $16 to $18 per share. The company’s shares trade on the Nasdaq under the stock symbol “NMRA.”

Neumora is a new-ish company, having emerged with a $400 million Series A round of financing in 2021 after its initial formation in 2019. But the company’s history goes back further. Neumora represents the combination of five acquisitions, each bringing drug development technologies and drug programs. One of them, BlackThorn Therapeutics, was a 2013 Scripps Research Institute spinout that applied computational tools to psychiatric drug R&D. BlackThorn’s research produced NMRA-140, later renamed navacaprant, which became Neumora’s lead program.

In July, Neumora began a Phase 3 test of navacaprant in major depressive disorder. The main ingredient in the once-daily pill is a small molecule designed to target the kappa opioid receptor, which represents a novel approach for treating depression. The drug is intended to modulate dopamine and reward processing pathways, which play key roles in regulating mood, cognition, reward, and behavior. Navacaprant is also in Phase 2 development in neuropsychiatric disorders.

Neumora has six additional programs in early clinical or preclinical development. The most advanced of this batch is NMRA-511, a small molecule designed to block vasopressin 1a receptor. A Phase 1 multiple ascending dose study is underway. According to the IPO filing, Neumora plans to begin a clinical test of this drug candidate in the first half of 2024, enrolling patients with agitation associated with Alzheimer’s disease. The other programs address a range of neurological conditions including schizophrenia, amyotrophic lateral sclerosis, and Parkinson’s disease.

When Neumora emerged from stealth in 2021, it also revealed an equity investment from Amgen and a partnership with deCODE Genetics, an Amgen subsidiary. Amgen is Neumora’s largest shareholder with a 22% post-IPO stake, followed by Arch Venture Partners with an 18.4% stake, according to the IPO filing.

The Neumora IPO comes just shy of a year after it closed a $112 million Series B round of funding, bringing its financing total to about $650 million. At the end of June, Neumora reported its cash position was $334.1 million. Combined with its IPO proceeds, the company plans to deploy $395 million for clinical and preclinical development of its pipeline. Another $30 million is earmarked for the research and development of other programs.

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