Shares of Cambridge biotechnology company Epizyme Inc. soared by more than 50 percent on their first day of trading Friday, a good sign for a wave of other life science businesses hoping to launch initial public offerings later this year.
Epizyme, which aims to develop treatments targeting genetic-based cancers, raised $77.1 million in the IPO priced at $15 per share — the high end of a range estimated by investment bankers. The shares closed Friday at $22.99 each.
“The IPO is a home run for Epizyme and also for the industry,” said Douglas MacDougall, president of Wellesley-based MacDougall Biomedical Communications. MacDougall’s firm has served as a consultant to Epizyme in the past but no longer represents the company.
Epizyme is the third Bay State biotech company to go public this year — following TetraPhase Pharmaceuticals and Enanta Pharmaceuticals, both of Watertown — and another half dozen could follow as the industry’s IPO market thaws from a deep freeze. The Globe reported last month that roughly 25 biotech companies nationwide could go public this year, which would be the most since 2007.
Only eight biotechs launched IPOs in 2008 and 2009 combined.
“The IPO market has been, let’s say, not so friendly,” said Harry Glorikian, founder of Scientia Advisors in Cambridge, a life sciences consulting firm. “I’m not saying it’s easy now, but it’s not impossible like it was.”
Investor interest in Epizyme is particularly encouraging for the biotech industry because the company is still so early in the process of developing its most advanced therapy. The drug, called EPZ-5676, remains in the first phase of a clinical trial that will test its effectiveness against a group of genes that cause two common forms of acute leukemia. Results will be published in the second half of the year.
Epizyme also is working on a drug to treat non-Hodgkin lymphoma as part of the company’s broader goal of commercializing personalized medications for patients with cancers caused by genetic mutations.
Epizyme reported revenues of $45.2 million and lost $1.2 million last year. It posted revenues of $6.9 million and lost $21 million the previous year.
The company, which was created in 2007, has been funded by five venture capital firms. One Boston investment firm, MPM Capital, owned 12.8 percent of Epizyme prior to the IPO.
Though it is far from taking a drug to market, Epizyme is “one of the most exciting companies in Boston,” MacDougall said. Other biotech companies are surely monitoring Epizyme’s performance in early trading and could be inspired to consider IPOs, if they have not already, he added.
The opportunity to raise much-needed capital is what is driving young biotech companies to the public marketplace, said Jonathan P. Gertler, a partner at Back Bay Life Science Advisors. Epizyme, for instance, had accumulated an operating deficit of $60.1 million through the end of March after six years in business.
“Public markets present a chance to improve a company’s finances in a way that hasn’t been available to biotech companies in recent years,” Gertler said. “It’s still not a panacea, but it’s certainly a positive trend.”