Kidney disease drug developer NephroGenex (NASDAQ:NRX) went public Tuesday, selling stock at $12 per share.
Shares showed some “pop” early, trading as high as $13. But shortly after noon, shares were trading under the open at $11.88. The Research Triangle Park company’s stock spent the afternoon below the IPO price trading as low as $11.52.
NephroGenex closed its first day of trading at $11.54.
NephroGenex priced the 3.1 million shares at the low end of the $12 to $14 per share range that the company had targeted. At $12 per share price, NephroGenex raised $37.2 million, which the company plans to use to finance clinical trials of its experimental diabetic neuropathy drug Pyridorin.
NephroGenex also has granted underwriters the opportunity to purchase another 465,000 shares.
Aegis Capital Corp. is handling the offering.
On Friday, Nephrogenex said that Care Capital “has indicated an interest in purchasing up to approximately $10.4 million in shares.”
Care Capital already is the largest shareholder and stands to own 38.9 percent of shares after an IPO and without an additional purchase, NephroGenex said.
In a “risk factor” as noted to investors, NephroGenex wrote:
“We have a significant stockholder, which will limit your ability to influence corporate matters and may give rise to conflicts of interest.”
The company said that “Care Capital will exert significant influence over us and any action requiring the approval of the holders of our common stock, including the election of directors and approval of significant corporate transactions. This concentration of voting power, which would increase to the extent Care Capital is allocated and purchases shares in this offering, makes it less likely that any other holder of common stock or directors of our business will be able to affect the way we are managed and could delay or prevent an acquisition of us on terms that other stockholders may desire.”
NephroGenex will join several Triangle firms that have executed IPOs over the past year.
Square 1 Bank and Argos Therapeutics also are in the IPO queue. (Check out WRALTechWire’s updated IPO watch.)
The region’s IPO list of firms located in the Triangle or with substantial operations in the region for 2013 was impressive:
- LipoScience, $75 million
- Chimerix, $107 million
- Intrexon, $160 million
- Heat Biologics, $26 million
- Regado Bioscience, $43 million
- ChannelAdvisor, $80 million
- CommScope, $577 million
- Aerie, $68 million
- Quintiles, nearly $1 billion
Nephrogenex had said that it expects to implement a 1 for 6.5 reverse stock split of its outstanding common stock just before the effective date of the stock offering. That means every 6.5 shares of common stock will be decreased to a single share of common stock. While the reverse stock split does not change a company’s valuation, it does change the value of each share.
Companies sometimes do reverse stock splits prior to an IPO to boost the price of each share and make the stock more attractive to potential investors.
Nephrogenex’s lead drug candidate, Pyridorin, was developed to slow the progression of diabetic neuropathy in patients with type 2 diabetes. Diabetic neuropathy is a chronic, degenerative condition of the kidney. The condition affects 6 million patients in the United States, according to figures from the Centers for Disease Control and Prevention. Diabetic neuropathy can progress to end-stage renal failure, requiring dialysis.
In some circumstances it can lead to death. Nephrogenex said it has already reached agreement with the Food and Drug Administration on the study goals for the phase III clinical trial of Pyridorin.