Vaxxinity IPO: Is biotech firm’s VAXX stock worth considering?

Highlights

• Vaxxinity, Inc. is expected to start trading on Nasdaq on Thursday, November 11
• The company is offering 6.7 million shares of its Class A common stock to potential investors
• The company's revenue was US$17,000 for the six months ended June 30 

The healthcare sector has witnessed a flurry of IPOs in recent times, which were successful in gaining investors' attention. Among others, Vaxxinity, Inc. is one of the major IPOs this week, that traders are eagerly waiting for.

Vaxxinity IPO: Is biotech firm’s VAXX stock worth considering?

Vaxxinity, Inc. was formed with the combination of two biotech companies, C19 Corp. (dba COVAXX) and United Neuroscience in March 2021. The deal value of the combination was around US$1.35 billion.

The firm is based in Dallas, Texas, and has its operations in various geographical locations, including Latin America, the US, Europe, and Asia. The employee strength of the company was 75 as of September 30.

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Vaxxinity is also a biotechnology company that aims to "democratize health" by discovering the "third biologic revolution", i.e. by developing vaccines for treating chronic diseases. The company is engaged in developing a therapeutics portfolio that would be used to treat diseases like Alzheimer's, Parkinson's, migraines, hypercholesterol, and various other disorders.

Along with the other therapies, the company has also a Covid-19 vaccine platform in its pipeline, which it believes to be the first of its kind -- multitype protein/peptide-based. In addition, the company also believes that its synthetic peptide vaccine platform could pave a way for low cost therapeutics while treating a range of indications.

The company's vaccine platform is designed to improve the immune system by stimulating antibodies production through treatment or other effects. Even though the traditional vaccines use these methods against infectious diseases, the firm believes it to be less effective when it comes to chronic diseases.

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IPO Details: shares offered and price range expectations

The Dallas, Texas-based biotechnology firm is offering 6.7 million shares of its Class A common stock to investors in its IPO. In addition, the underwriters will have the option to buy an additional 1,005,000 shares of its Class A common stock for a period of 30 days at the initial public offering price, less the underwriting discounts and commissions.

Meanwhile, after the completion of the offering, the firm would have two classes of common stock, i.e. the Class A common stock has one vote per share, and Class B common stock ten votes per share.

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The price range for the initial public offering is expected to be between US$14.00 and US$16.00 per share. It is expected that the firm would go public on Thursday, November 11, under the ticker symbol "VAXX" on the Nasdaq Global Market (NASDAQ).

Meanwhile, the firm expects the net proceeds from this offering to be around US$85,533,432 or about US$99,553,182 if the underwriters exercise in full their option to purchase additional shares from the company.

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Financial information of Vaxxinity

For the six months ended June 30, the company's revenue was US$17,000, as compared to US$440,000 in the year-ago period. Its loss from operations came in at US$46.94 million, against a loss of US$8.36 million in the same period of the prior year.

For the period, the company reported a net loss of US$58.59 million, as compared to a loss of US$10.77 million in the quarter that ended on June 30, 2020.

Its cash and cash equivalents were US$110.84 million as of June 30, versus US$31.14 million through December 31, 2020.

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Bottomline:

The lead book-running managers for the IPO would be Jefferies, BofA Securities, and Evercore ISI. Meanwhile, the company's co-founder and CEO Mei Mei Hu believes the company's Covid-19 vaccine candidate UB-612 to be "safe and mild". She added that for flu-like symptoms, its vaccine candidate doesn't bring down the recipients for a couple of days.

In addition, the company's vaccine for Covid-19 may remain stable in standard refrigeration temperature, which also helps the company to distribute the vaccines in developing countries.