CG Oncology is first biotech IPO of 2024, raising $380m

CG Oncology has taken the ribbon for the first biotech initial public offering (IPO) of the new year and its $380 million raise – which far outstrips the proceeds forecast – backs up the view that a recovery in the sector is on the way.

Just last week, the Irvine, California-based company was expecting to raise around $200 million from an offer of less than 12 million shares priced at $17, but it managed to sell 20 million at $19 apiece, way ahead of its projections.

CG Oncology – which is firmly in unicorn territory with a valuation of more than $1.1 billion – will start trading on the Nasdaq this morning under the CGON ticker.

The largest share of the new cash will go towards the development of CG Oncology’s only drug candidate, cretostimogene grenadenorepvec, which is in late-stage development for high-risk BCG-unresponsive non-muscle invasive bladder cancer (NMIBC). BCG is the standard first-line immunotherapy for early-stage bladder cancers after surgery to remove visible cancer.

Cretostimogene grenadenorepvec is an oncolytic virus that is delivered directly into the bladder and is designed to replicate preferentially in tumour cells, stimulating an immune response against them.

The therapy was awarded fast track and breakthrough designations from the FDA in December as a treatment for high-risk BCG-unresponsive NMIBC with carcinoma in situ, with or without papillary tumours.

NMIBC is the most common form of bladder cancer, accounting for approximately 75% of the approximately 82,000 newly diagnosed cases in the US every year.

CG Oncology’s oncolytic virus is being tested as a monotherapy in the phase 3 BOND-003 trial, as well as the phase 2 CORE-001 study in the same patient population as a combination therapy with MSD’s PD-1 inhibitor cancer immunotherapy Keytruda (pembrolizumab).

Results from an interim analysis of BOND-003 were reported at the Society of Urological Oncology (SUO) congress last October, showing that patients treated with the drug had a complete response rate of more than 75%, with no serious adverse events.

Other types of bladder cancer are being evaluated as potential candidates for cretostimogene grenadenorepvec therapy in combination with Bristol-Myers Squibb’s PD-1 inhibitor Opdivo (nivolumab).

CG Oncology is one of five biotechs that have signalled their intention to go for an IPO this year, alongside Alto Neuroscience, ArriVent Biopharma, Kyverna Therapeutics, and Metagenomi, suggesting that the environment for public listings is improving – at least for companies with drug candidates in late-stage development.

After a record high of 89 IPOs in the life sciences sector in 2021 - amid the pandemic - the number plummeted to 19 in 2022 and just 16 last year, according to a report (PDF) published earlier this month by the University of Florida.