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Watertown’s Dicerna raises $90m in IPO

Shares of newly public Dicerna Pharmaceuticals Inc. barreled up nearly 207 percent in their first day of trading Thursday, giving the Watertown biotechnology startup the largest opening-day gain of any company since the Chinese search engine Baidu.com went public in 2005.

Dicerna, which is working in the hot field of RNA interference, became the second Massachusetts company — and the first biotech — to complete an initial public offering this year. Nine state biotechnology companies made it through the IPO threshold last year.

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“This is the best time to go public since 2000 for biotechs,” said Christoph Westphal, executive chairman of Verastem Inc., a Cambridge company developing cancer drugs that started the latest IPO wave when it went public two years ago. “A lot of the innovation is now happening in biotechs rather than pharmaceutical companies. If you have really fundamentally important science that could change therapeutic approaches, you can attract investors.”

Dicerna priced its initial public offering at $15 a share late Wednesday night, a 25 percent premium over the $11 to $13 range it specified last week. The company sold 6 million shares, raising $90 million and nearly doubling its cash on hand to finance development of drugs to treat cancers and liver diseases based on its gene-silencing technology known as RNAi.

In addition, Dicerna said it granted stock underwriters a 30-day option to buy another 900,000 shares at the public offering price by Feb. 4, potentially further boosting its cash reserves. Boston investment bank Leerink Partners LLC was a manager of the company’s IPO along with Jeffries LLC; Stifel, Nicolaus & Co.; and Robert W. Baird & Co.

Dicerna opened on the Nasdaq exchange at $30 a share Thursday under the ticker symbol DRNA. Its stock closed at $46 a share, a gain of $31 from its original price.

Company executives declined to talk about Dicerna until the IPO closes next month, a spokesman said. The stock offering had been closely watched in Massachusetts and beyond both as a test of investors’ continued appetite for biotechs in 2014 and of interest in the field of RNA therapeutics. Several companies involved in RNA work have disclosed investments, partnerships, and positive clinical results in recent weeks, including Cambridge-based Genzyme, Alnylam Pharmaceuticals Inc., Moderna Pharmaceuticals Inc., and Sarepta Therapeutics Inc.

Westphal, who is also a partner at the Boston venture capital firm Longwood Fund, has taken five biotechs public, including Alnylam and Verastem. He said the promise of RNAi, which can block the overproduction of proteins that cause diseases, has been around for more than a decade but has only recently begun to reach fruition in clinical trials enlisting humans.

While the opening-day pop for Dicerna ranked as one of the largest ever, the amount raised in the IPO was relatively small compared with other companies that enjoyed giant opening day gains, said Kathleen S. Smith, principal at IPO investment advisory firm Renaissance Capital LLC in Greenwich, Conn. At the same time, she said, investments by insiders made up 53 percent of the offering, meaning there were not a lot of tradeable shares for other investors.

Nonetheless, said Smith, the Dicerna offering demonstrated “there is a very strong interest in biotech by investors. We haven’t seen this kind of interest in biotech for a long time.”

Of the 11 companies that have gone public so far this year nationally, the two IPOs in Massachusetts had the highest first-day gains, according to Renaissance data. In addition to the Dicerna offering, shares of Care.com, a Waltham-based online marketplace for personal care services, climbed nearly 43 percent in their first day of trading last Friday.

Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.
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