Drug Developer Acelyrin Raises $540 Million in IPO

Acelyrin’s shares rose more than 30.5% to close at $23.50.

After a surge of biotech IPOs in 2021, the market for these stock sales has slowed as rising interest rates have driven investors from riskier deals. 

Acelyrin is the seventh biotech to go public this year on the Nasdaq, the exchange that hosts most biotech IPOs. Twenty-two biotechs went public on the Nasdaq in 2022 and 110 listed on the exchange in 2021, according to Nasdaq.

With banking sector turmoil adding to economic uncertainty, now wouldn’t seem an ideal time for a startup to brave the market.

Acelyrin, founded in July 2020, isn’t a typical startup. It secured more than $550 million in venture capital—including a $300 million financing in September—despite a tightening market for startup financing.

Instead of discovering new drugs, as biotech startups typically do, Acelyrin has acquired a portfolio of potential treatments for immunological conditions.  

Its lead drug, izokibep, is in clinical trials as a therapy for hidradenitis suppurativa, in which painful bumps form under the skin; psoriatic arthritis, a form of arthritis affecting some psoriasis patients; and uveitis, or inflammation in the eye. Acelyrin also plans to develop izokibep for axial spondyloarthritis, whose symptoms include back pain.

Acelyrin gained access to izokibep through a 2021 deal with biotech company Affibody except in certain Asian countries. In January Acelyrin acquired biotech startup ValenzaBio and obtained a potential treatment for thyroid eye disease, an autoimmune disease that causes the eye to protrude. The drug is now in clinical trials. Acelyrin also gained a potential therapy for chronic urticaria, or hives, that is expected to enter clinical trials soon.

Acelyrin’s chief executive, Shao-Lee Lin, previously was chief scientific officer of drug company Horizon Therapeutics and also held positions with drugmaker .

Acelyrin was mindful of the difficult market conditions but decided it could go public successfully because of the promise of its growing portfolio of drugs, Dr. Lin said.

“It seemed like the right time to approach the public markets and present our story,” she added.

Companies like Acelyrin that have experienced management and a strong pipeline of drugs are the types that can go public in markets like this one, said Jordan Saxe, head of healthcare listings and capital markets for Nasdaq.

“You tend to reopen markets with your best candidates first,” Mr. Saxe said.

Acelyrin’s IPO likely isn’t a sign that the market for biotech IPOs is poised to open as widely as it did in 2021, said

“Investors are highly selective,” Dr. Seidenberg said. “It takes a special company to go public when a market is in a tenuous or rocky position.” 

Write to Brian Gormley at [email protected]