6.25 Mln shares
Read management/analysts’ comments on quarterly earnings
The IPO price has been revised down to the range of $7 per share to $9 per share from the original price of $14-$17 apiece. The group of book-runners is led by Berenberg Bank and Oppenheimer & Co. The proceeds expected from the offering have remained unchanged even after the revision. But, it would now value the company at $288 million, down 43% from the valuation originally estimated. The proceeds will mainly be used for the development of existing candidates and acquisition of new candidates to expand the portfolio.
Unique Model
Ocean Biomedical collaborates with leading research universities to develop and license therapies for various ailments, primarily cancer, fibrosis, and inflammation. The unique model helps it identify the inventions created at such institutions, which might otherwise go unnoticed, and use them for the benefit of patients. The arrangement is expected to help in building a continuous pipeline of products for the treatment of various diseases.
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Programs in oncology and fibrosis are based on exclusive licenses with Brown University, while those in infectious diseases are based on exclusive licenses with Rhode Island Hospital. Inflammation programs are based on a nonexclusive license with Stanford University. Since there are no other known licensees for the programs, the management expects to bring some of the preclinical product candidates to the market in one-and-half years.
The key factors that differentiate the company are its diverse portfolio, the process of harnessing inventions from research universities and medical centers for clinical use, and the development of new drugs through a milestone-driven approach.
Risks
Currently, the main risk facing the company is its extensive reliance on licensing agreements with Brown University, Rhode Island Hospital, and Stanford University. Also, it is part of an industry that is highly competitive. Like all biotechnology firms, high costs and uncertainties related to drug development programs might delay the generation of product revenue that is sufficient to achieve profitability.
The company did not generate any revenue in the three months ended March 31, 2021. Research & development costs were $25.4 million, which resulted in a wider loss of $43.9 million or $1.15 per share.