Moderna Declines in Market Debut -- WSJ
December 08 2018 - 2:02AM
Dow Jones News
By Corrie Driebusch and Kimberly Chin
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (December 8, 2018).
Moderna Inc. on Friday lodged one of the worst-performing
opening days for a company going public this year, as investors
sold the risky biotechnology firm amid broad market declines.
The stock, trading on the Nasdaq Stock Market under the symbol
MRNA, dropped 19% to $18.60, well below its initial-public-offering
price of $23. That makes it the fifth-worst performer on its first
day among all U.S.-listed IPOs this year, according to Dealogic.
Its drop was the biggest among companies worth more than $1 billion
at the time of their IPO since April 2017, when Carvana Co. fell
26%.
On Thursday, the Cambridge, Mass., company's stock sale to
investors was strong: It sold 26.3 million shares -- more than
expected -- and priced in line with expectations. It raised $604.3
million, giving the company a valuation of more than $7.5
billion.
Launching an IPO into such a rocky stock market was a gamble for
Moderna. The S&P 500 has fallen roughly 4% since the company
began its roadshow, where management meets with potential investors
to pitch the IPO. Moderna's shares priced Thursday after a late
rally nearly erased the day's prior deep declines. On Friday, the
stock selloff deepened.
Still, Moderna's decline was much sharper than that of the
broader markets. It lost nearly a fifth of its value, while the
S&P 500 finished the day down 2.3%.
From the start of the roadshow last week, the company and its
underwriters assured potential investors they could complete the
deal, according to a person familiar with the offering.
One reason for their confidence was the many so-called
testing-the-water meetings Moderna management had with fund
managers and analysts in the years leading up to the IPO. Some fund
managers said they skipped the company's IPO roadshow because they
already understood Moderna's business from those past meetings.
Moderna's debut, one of the largest biotechnology IPOs, is
considered to be one of the last big deals in a year that has
brought in more than 200 new U.S. listings and raised more than $58
billion.
It has also been a banner year for biotech offerings. More than
60 biotech and pharmaceutical companies have listed shares in the
U.S. this year, raising $7.1 billion, according to Dealogic. That
makes it the second-biggest year on record for the industry and the
biggest since 2014.
Moderna, which was founded in 2010, has 21 drug and vaccine
research programs, including 10 that have progressed beyond the
laboratory and are being tested in humans.
The company has drawn much fanfare, luring investors on the
promise that its messenger RNA technology will bring new treatments
for cancer, heart disease and other diseases. Critics have raised
concerns that there is not much public information out about the
company and that some of its programs remain relatively unproven
since many are still in the earlier stages of clinical testing.
Before it began trading, Moderna's IPO process had drawn some
controversy. The company disclosed on Tuesday that it had dropped
an underwriter, claiming the firm had made "unauthorized
communications" about the offering.
Write to Corrie Driebusch at corrie.driebusch@wsj.com and
Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
December 08, 2018 02:47 ET (07:47 GMT)
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