Ouch. The American Depositary Shares (ADS) of Adlai Nortye Ltd. (ANL) closed their first day of NASDAQ trading today at $15.00 – down $8.00 or off 34.78 percent from their $23.00 IPO price. The Cayman Island company’s NASDAQ debut got off to a rough start. Adlai Nortye’s ADS slid 21.7 percent to open at $18.00 – $5.00 below their $23.00 IPO price – at 11:10 a.m. EDT today (Friday, Sept. 29, 2023), according to NASDAQ records. Shortly after 11:40 a.m. EDT today, Adlai Nortye’s ADS were trading at $16.14.
Adlai Nortye’s IPO pricing was a plain vanilla affair. Adlai Nortye, the parent of a cancer biotech with operations in mainland China and central New Jersey, priced its IPO at $23.00 and sold 2.5 million American Depositary Shares (ADS) – in sync with the terms in the prospectus – to raise $57.5 million on Thursday night (Sept. 28, 2023). Each ADS represents three of Adlai Nortye’s Class A ordinary shares.
Cantor was the sole book-runner of Adlai Nortye’s IPO.
The IPO’s pricing on Sept. 28 came exactly a month after Adlai Nortye had postponed its IPO. The original terms had called for pricing 3.0 million ADS at a price range of $22.00 to $26.00 to raise $72.0 million.
Adlai Nortye leaped onto this week’s IPO Calendar after the holding company disclosed terms in an F-1/A filing on Wednesday (Sept. 27, 2023). In that filing, Adlai Nortye said “a potential investor” had indicated an interest in buying $50 million – or 87 percent – of the stock in the IPO. The filing did not identify the “potential investor.” This attracted some attention. It’s not unusual for a company to identify cornerstone investors along with the total dollar amount of their indication of interest in a note on the cover of the prospectus.
Concurrent with the IPO, Adlai Nortye sold $40.0 million of Class A ordinary shares in a private placement to Nippon Kayaku Co., Ltd., a chemical company headquartered in Japan. Nippon Kayaku undertakes the development, manufacturing and sale of functional chemicals, pharmaceuticals, safety systems and agrochemicals, according to the prospectus.
Cancer Drug R&D in China & N.J.
Adlai Nortye Ltd. is a holding company based on Grand Cayman in the Cayman Islands. It is the parent of a cancer-focused clinical biotech company with two R&D centers – one in the New Jersey Biotechnology Development Center in North Brunswick, N.J., and one in Hangzhou in the People’s Republic of China. The company “has identified and developed a robust pipeline of six drug candidates,” the prospectus says. Its pipeline includes three clinical-stage drug candidates and three in-house pre-clinical programs.
“Our most advanced program is our lead product AN2025, a pan-phosphoinositide 3-kinase (“PI3K”) inhibitor that is designed to act against solid tumors,” the prospectus says. “AN2025 is currently undergoing a Phase III multi-regional randomized open-label clinical trial for the treatment of recurrent or metastatic head and neck squamous cell carcinomas (“HNSCC”) after anti-programmed death-1 (“PD-1”) or its ligand (“PD-L1”) treatment in more than 180 sites in 18 jurisdictions covering North America, Europe, Asia and South America.
“We believe that AN2025, if approved, has the potential to be first-to-market, and is currently the only drug candidate in active Phase III clinical trial targeting recurrent or metastatic HNSCC (head and neck squamous cell cancer) patients after progression on prior anti-PD-1/PD-L1 therapy, potentially addressing a global unmet medical need.”
Like most biotech companies, Adlai Nortye has a history of net losses and no revenue from the sale of commercial products. For the 12 months that ended June 30, 2023, Adlai Nortye reported a net loss of $122.65 million on no revenue, according to financial statements in the prospectus.
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