Good Start at the Trading line for G1 Therapeutics
There is just something about cancer treatment developing companies that makes investors want to jump to the front of the line. It could be the size of the market. After all, no one can doubt that it’s worth billions. Then again maybe it’s just the humanity of it all.
The beginning of 2017 has been an interesting year for companies operating in this bracket. In the US, the IPO climate was open to them. Companies like UroGen and BioHaven launched their IPOs and landed on their feet. Others like Ovid Therapeutics were not so lucky in the beginning, but they’ve started picking up. Ovid sold off its initial shares well below its range, but now its stock is trading at the IPO price. Joining a long line of biopharma hopefuls was G1 Therapeutics (Pending: GTHX) which started trading on Wednesday. And what a strong start that was.
When company CEO Dr. Mark Velleca started hinting at an IPO back in 2016, many bets were on the table. Some people opined that an IPO would not be such a good thing. After all, G1 Therapeutics is only a biopharma startup with no products in the market yet. Wall Street labeled the firm a bit weak to take on its bullish competitors. A few insiders said that time would tell, but the company’s products were on track, and that was a good thing. Firm management relayed that they were developing first-in-class products so making a few losses on the way if the firm could recoup them after getting its drugs on the market. If G1 Therapeutics’ performance on its opening trade is anything to go by, the firm is on its way to being a monopoly in the cancer treatment sector.
Before the market opened G1 Therapeutics has said that it was going to sell off 6.25 million shares. The expected pricing was between $15 and $17. On Wednesday the company sold off its 7 million common stock at $15 apiece. The increased number of shares sold off spiked the IPO proceedings to $105 million on the first day. With the raised deal, G1 Therapeutics capped a market value of $460 million on NASDAQ.
So far investors have been impressed by the biopharma’s performance. Even underwriters like Morgan Stanley and Cowen & Co. have shown interest in buying up overallotment shares. For investors, there have been several reasons for this. Number one G1 Therapeutics drug candidates are onto their final rounds in testing. That means investors may seeing some returns soon. Add to that the fact that the firm has vast liquid assets, adding up to $47.3 million in 2016. The +7% trade on G1 Therapeutics shares is proof of investors’ confidence. This is especially if you consider that NASDAQ dropped 2 percent on Wednesday.
But people should not advocate for G1 Therapeutics shares just yet. Nobody can be sure that the company’s drugs will be approved. G1 Therapeutics also has a track record for making losses in the millions, and who’s to say that that will stop with the IPO.