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Zentalis Pharmaceuticals Climbs in Debut After Expanded IPO

Zentalis Pharmaceuticals Raises $165 Million in Expanded IPO

(Bloomberg) -- Zentalis Pharmaceuticals Inc., a clinical-stage cancer treatment developer, rose 29% in its trading debut after raising about $165 million in an initial public offering.

The company’s shares, which surged as much as 50% from the $18 offer price, closed Friday at $23.20, giving the firm a market value of $798 million. Zentalis sold 9.18 million shares on Thursday at the top of a marketed range, after expanding the IPO from 7.65 million shares.

The listing by New York-based Zentalis was the second in the U.S. since Covid-19 was declared a pandemic. Chinese software company WiMi Hologram Cloud Inc. went public this week after downsizing its share sale to raise $26.1 million, down from its earlier target of $37.7 million.

IPOs in the U.S. had come to a halt after the pandemic triggered a global stock rout in mid March. Companies and advisers have been reluctant to launch a listing amid the extreme market volatility.

Along with software, biotech listings in the past year have been among the most reliable performers, in contrast to disappointing results for many higher-profile companies including Uber Technologies Inc. and Lyft Inc.

“Biotech, biopharma will be the sector that opens the IPO market back up and we will see more SPACs,” said Jordan Saxe, head of health-care listings at Nasdaq, referring to special purpose acquisition companies. “The mentality of the investors is much more long term versus a more short-term quarter-to-quarter view.”

Saxe estimates that 30 to 35 biotech companies will go public this year, raising about $3.5 billion, assuming social distancing aimed at curtailing the spread of the pandemic ends by June. Last year, 46 biotechnology companies completed their IPOs on U.S. exchanges and raised $5.46 billion, according to data compiled by Bloomberg.

Zentalis focuses on discovering and developing drugs that targets the fundamental biological pathways of cancers. Its oral treatment for breast cancer, in partnership with Pfizer Inc., is in clinical trials, according to its filing with the U.S. Securities and Exchange Commissions.

The offering was led by Morgan Stanley, Jefferies Financial Group Inc., SVB Leerink Holdings LLC and Guggenheim Securities LLC. Zentalis is trading on the Nasdaq Global Market under the symbol ZNTL.

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