Fusion Pharmaceuticals increases IPO offering to US$230-million amid strong investor demand

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Hamilton’s Fusion Pharmaceuticals Inc. has increased its planned initial public offering on the Nasdaq by half and now hopes to raise up to US$230-million, the biotechnology developer said late Wednesday.

The cancer drug developer filed Monday to go public, laying out plans to sell 8.35 million shares at US$14 to US$16 apiece, plus an option for its four US underwriters to buy 1.25 million more at the issue price.

In a filing Wednesday with the U.S. Securities and Exchange Commission, Fusion said it now plans to sell 12.5 million shares at the same price range, with the underwriter option increased to 1.875 million shares. It is expected to start trading on Friday.

The IPO – which would be the second largest by a Canadian biotech after last week’s debut by Repare Therapeutics Inc. – values Fusion at US$583-million to US$700-million. It also positions Fusion to become the latest in a string of Canadian life-sciences startups to reach a US$1-billion valuation if its stock shoots up when it begins trading, as has been the case for many other biotech IPOs this year.

This has been a strong quarter for biotechnology IPOs amid heightened investor interest for drug developers seen as immune from the impact of the pandemic, investment bank Renaissance Capital said in a report Wednesday. During the second quarter “nearly every IPO upsized or priced above the midpoint” of their target range and IPOs jumped in price by 39 per cent on average from their issue price, said Renaissance, which tracks IPO activity.

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