Obesity biotech Kailera's record-breaking IPO
When Kailera revealed its plans for an IPO last month, there was a feeling that it could be huge – and that expectation has now been fulfilled.
Waltham, Massachusetts-based Kailera – which is due to start trading on the Nasdaq today under the KLRA symbol – has raked in a massive $625 million from the sale of 39 million shares at the top end of its $14 to $16 price range, which is believed to be a record for a biotech IPO on the exchange.
Moreover, the total tally could climb even higher, by up to almost $93 million, if the underwriters of the IPO take up an option to buy an additional tranche of 5.8 million shares.
Even without that potential top-up, Kailera's listing is already ahead of mRNA vaccine specialist Moderna's $604 million IPO in 2018, the $588 million raised by cell therapy company Sana Biotech in 2021, and immunology drug developer Acelyrin's $540 million debut in 2023.
It's not a complete surprise, given that, despite only emerging from stealth in 2024, Kailera has already closed $600 million in a Series B financing and another $400 million in its first round, fuelled by what seems to be a near-insatiable investor appetite for stocks with clinical-stage candidates for weight loss.
It also continues a spike in biotech IPOs this year that already looks likely to eclipse fairly desultory numbers in 2024 and 2025.
Kailera's heady valuation – likely to come in at more than $2.1 billion, according to Renaissance Capital – is driven by an advanced-stage obesity pipeline, with a phase 3 trial already underway for an injectable version of its lead candidate, dual GIP and GLP-1 agonist ribupatide, which works in a similar way to Eli Lilly's blockbuster weight-loss drug Zepbound (tirzepatide).
An oral version of the drug, which is licensed from Chinese pharma company Hengrui Pharma along with the rest of Kailera's pipeline, has also shown efficacy in a phase 2 trial conducted in China and could be a competitor to Novo Nordisk's Wegovy (semaglutide) pill and Lilly's Foundayo (orforglipron), both oral GLP-1 agonists.
Following after in Kailera's pipeline is an oral GLP-1 candidate, KAI-7535, which is in phase 3 in China, and a 'triple G' (GIP, GLP-1, and glucagon) agonist – KAI-4729 - that could be a competitor to Lilly's retatrutide and Novo Nordisk's UBT251, for which Hengrui is running a phase 1 study.
Kailera – which is run by former Cerevel Therapeutics CEO Ron Renaud (pictured top) – will use the IPO cash to fund three ongoing phase 3 trials of ribupatide in overweight/obesity, with and without type 2 diabetes, along with a phase 2 trial of KAI-7535 and a phase 1 study of KAI-4729 this year.
Kailera has become closely watched in the weight-loss category as a potential buyout candidate, given that last year Pfizer reached a deal to buy another company in that mould, Metsera, shortly after its $289 million IPO, in a $4.9 billion deal.
