Millions of Americans are out of work because of the pandemic. Protests against racism are roiling the United States and other countries. It must be a bad time for a startup to go public on the stock market, right?
Akouos doesn’t think so. A Boston biotech trying to develop the first gene therapy to treat hearing loss, it has increased what it hopes to raise in its initial public offering Friday to $125 million amid recent strong debuts by other biopharma startups.
Akouos said in a filing with the Securities and Exchange Commission on Monday that it plans to offer 8.3 million shares at a price range of $14 to $16 on Nasdaq for a total of $125 million. That’s up from the $100 million announced two weeks ago.
Matt Kennedy, a senior strategist for Renaissance Capital, a pre-IPO research provider for institutional investors, said IPOs by biotechs have generated investor enthusiasm despite the COVID-19 pandemic and a recession that has left millions of Americans unemployed.
“The biotech space has been largely insulated from market turbulence,” Kennedy said, in part because drug development takes years, making gyrations less worrisome. “If a biotech isn’t planning to run trials until 2025, it makes little difference if unemployment is high right now or people are traveling less.”
So far this year, 23 biotechs nationwide have gone public. On average, their share prices closed up more than 36 percent on the first day of trading and are up an average of almost 82 percent from their IPO prices, he said.
Last Friday alone, two biotechs with operations in Massachusetts went public and together raised nearly $500 million.
Repare Therapeutics, a precision oncology company with offices in Cambridge and Montreal, raised $220 million when it sold 11 million shares at $20 each — the upper end of the previously disclosed price range. Repare’s share price closed Friday at $30.80, up 54 percent.
Forma Therapeutics, a Watertown biotech seeking to treat rare blood disorders and forms of cancer, meanwhile raised $276 million when it debuted on the stock market after pricing 13.8 million shares at $20. Forma closed at $39 a share Friday, up 95 percent.
Among the other local biotechs with big IPOs this year were three Cambridge startups: Black Diamond Therapeutics, which raised $201 million in January; Beam Therapeutics, a genome editing startup that raised $180 million in February; and Generation Bio, a genetics medicine company that raised $200 million earlier this month.
Some analysts say COVID-19 has underscored the promise of biotechnology to address deadly health threats. Among the biotechs whose market values have soared during the pandemic is Moderna, a Cambridge drug company that was the first to get an experimental coronavirus vaccine into human trials. Moderna, which went public in 2018, has a market value of more than $24 billion, though it has no approved products.
Akouos, founded in 2016, is trying to develop the first gene therapy to treat hearing loss — in particular, a form of deafness caused by mutations in a single gene. Gene-based hearing loss afflicts 300,000 people in the United States each year, including more than 4,000 newborns.
Its lead candidate is a treatment for a type of genetic hearing loss that afflicts about 7,000 people. The company hopes to use a small virus called adeno-associated virus, or AAV, as a vector to deliver DNA that encodes a functioning gene in target cells. These viruses don’t typically cause disease and can be customized to treat different inherited conditions.
Akouos has partnerships with Massachusetts Eye and Ear and Lonza, a Swiss multinational manufacturer that has contracts with drug makers.
The company’s cofounder and chief executive is Manny Simons, who grew up in a musical family in Western Massachusetts and considered working as a musician but was also drawn to medicine. He ultimately combined his passions, earning an undergraduate degree in music and neuroscience from Harvard College, a PhD in biomedical engineering at the Massachusetts Institute of Technology, and an MBA from Harvard Business School.
“It’s easy to take hearing for granted, and maybe because music has been important to me, it’s something that I take a little less for granted,” Simons, who plays Bach and the late jazz pianist Bill Evans on the piano for fun, told the Globe in 2018.
Before he cofounded Akouos, Simons had leadership roles at Voyager Therapeutics and WarpDriveBio.
Jonathan Saltzman can be reached at email@example.com.