Kailera Therapeutics Inc. shares surged 63% after the clinical-stage biotechnology company focused on obesity raised $625 million in an upsized US initial public offering.
The company's shares opened at $26 each on Friday at 1:25 p.m. in New York, above its IPO price of $16 apiece. The Waltham, Massachusetts-based firm had marketed 33.3 million shares for $14 to $16 each.
The trading gives Kailera a market value of almost $3.1 billion based on the outstanding shares listed in its filings.
Kailera joins a crowded field of drugmakers jockeying to win a slice of what could be a $200 billion obesity market by 2030. Eli Lilly & Co. and Novo Nordisk A/S lead the pack with US-approved weight loss pills and shots already available to patients. Meanwhile, potential takeover targets Arrowhead Pharmaceuticals Inc. and Wave Life Sciences Ltd. are exploring fat loss drugs that preserve muscle mass without the use of GLP-1s.
Ronald Renaud, Kailera's Chief Executive Officer, said focusing on patients with severe obesity -- defined as patients with a body mass index over 35 -- and improving the tolerability of treatments will differentiate it from competition. For those patients, obesity pills are not as effective.
"We do not believe that injectables are things of the past," he said in an interview. "GLP-1 injectable approaches are foundational for treating patients who need greater weight loss."
Founded in 2024, the late clinical-stage biotech is developing four GLP-1 based weight-loss drugs, including a weekly shot and once-daily oral tablet licensed from its China-based partner, Jiangsu Hengrui Pharmaceuticals. Drugmakers are increasingly turning to China to license experimental medicines to mitigate development costs.
"We're mindful of the geopolitical backdrop, that's why we build all of our capabilities here in the US and we leverage a US-based supply chain, but it starts at Hengrui," Renaud said.
Existing shareholders including Bain Capital Private Equity, Bain Capital Life Sciences and Qatar Investment Authority had indicated interest in buying as much as $225 million of shares in aggregate at the IPO price, according to filings. Affiliates of Bain Capital were set to own about a third of the company after the offering.
Kailera's Renaud was the CEO of Cerevel Therapeutics Inc. until the close of its $8.7 billion acquisition by AbbVie Inc. in 2024.
JPMorgan Chase & Co., Jefferies Financial Group Inc., Leerink Partners, Toronto-Dominion Bank and Evercore Inc. led the offering. The shares trade on the Nasdaq Global Market under the symbol KLRA.