Kardigan surges in Nasdaq debut after upsized $400 million IPO

By Aditi Tiwari and ‌Prakhar Srivastava

June 18 (Reuters) - ​Kardigan's ​shares rose 31% above their initial public offering price on Thursday after the heart drug developer raised $400 million in an upsized ‌U.S. initial public offering, signaling strong investor appetite for new biotech ⁠listings.

The Princeton, New Jersey-based company's shares opened at $16.25, above its IPO price of $16 per share, ‌and were last up 22.3%.

The ‌strong market debut underscores renewed investor appetite for biotech companies with advanced clinical programs and promising drug pipelines as improving market conditions reopen ​the IPO window for the sector.

"We've seen the market recover lately, with proceeds already substantially ahead of last year's levels, but this is not ⁠a return to the 2020-2021 'free-for-all', when many companies were still at very early or pre-clinical stages," said ​IPOX Research Associate Lukas Muehlbauer.

The clinical-stage biotech Kardigan is developing precision medicines for cardiovascular diseases and is advancing three ​late-stage experimental therapies- danicamtiv, ataciguat and tonlamarsen.

"Going public ‌gives us access to long-term investors that believe in our mission, and it gives us the capital to see ⁠it through for companies that are solving real problems like cardiovascular disease," CEO Tassos Gianakakos told Reuters in an interview.

"We'll have important data from all of those programs ⁠in the first half of next year that we believe will unlock a lot ​of value." Gianakakos said.

Gianakakos and Chief Medical Officer Jay Edelberg founded Kardigan after helping develop heart drug mavacamten at MyoKardia, which Bristol Myers Squibb acquired for $13 billion in 2020.

"Kardigan ‌disclosing that it wouldn't have cash reserves to fund operations for at least 12 months – this is exactly why ‌they are raising money now," Muehlbauer said, adding "still, investors may watch out for ⁠potential follow-on offerings as an overhang, ‌particularly as the company ​said it may seek additional capital in favorable market conditions."

(Reporting by Aditi Tiwari and Prakhar Srivastava in Bengaluru; Editing by ‌Shailesh Kuber)

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