Weight-loss drug developer Metsera, backed by ARCH Venture Partners, revealed a wider loss in its paperwork for a U.S. initial public offering on Friday.
The terms of the IPO were not disclosed in the filing.
Strong equity markets, falling interest rates and hopes of a friendlier regulatory environment under the incoming Trump administration have given a push to companies looking to list their shares.
Metsera, founded in 2022 by venture capital firm ARCH Venture and investment firm Population Health Partners, revealed a net loss of $156.26 million in the first nine months of 2024, compared to a loss of $34.18 million in the same period in 2023.
The New York City-based biotech firm is developing injectable and oral drugs to treat obesity, based on the GLP-1 mechanism and other biological targets.
The company will use the proceeds from the IPO to advance into the next stage of clinical trials for its most advanced product candidate, MET-097i, an injectable. The remainder will be used for working capital and other general purposes.
The weight-loss drug market, which is estimated by analysts to reach at least $150 billion by the early 2030s, has boomed globally with several companies vying for a share of the pie.
This attractive market has also whetted investor appetite, with the strong reception of BioAge and MBX Biosciences last year.
In 2023, the World Health Organization decided not to add GLP-1 drugs to its essential medicines list, a catalog of the items that should be available in all functioning health systems.
However, another application has been lodged for the agency to reconsider their inclusion in the 2025 list update, a spokesperson told Reuters in December.
The company raised $290 million in funding last year, with participation from firms such as SoftBank and Mubadala Capital.
Metsera intends to list its shares on the Nasdaq Global Market under the ticker symbol “MTSR”.
BofA Securities, Goldman Sachs, Evercore ISI, Guggenheim Securities and Cantor are the underwriters for the offering.
Wall Street’s most watched gauge of investor anxiety rose to a three-week high on Friday as stock indexes sold off following a an upbeat jobs report that pushed back market expectations for further Federal Reserve interest rate cuts.
The Cboe Volatility Index - an options-based indicator that reflects demand for protection against drops in the stock market - was last up 1.1 points to 19.18. The index reached 20.31, its highest since Dec. 20, earlier in the session.
A reading of 20 or higher on the VIX is associated with robust demand for options protection. Friday’s rise in the index - often dubbed the “Wall Street fear gauge” - pointed to investors waking up to the risks that lurk for stocks even as the S&P 500 remains within 5% of the record high hit in early December.
“Volatility is picking up and interest rate markets are doing interesting things,” said Michael Purves, CEO of Tallbacken Capital Advisors.
“That’s putting a lot of pressure on an equity market that has very extended valuations,” he said.
Longer-dated U.S. Treasury yields jumped to their highest levels since November 2023 on Friday after data showed employers added 256,000 jobs in December, far surpassing economists’ expectations, while the unemployment rate fell.
Worries that the incoming Donald Trump administration’s policies will increase an already bloated fiscal deficit and revive inflation have helped ignite a rally in Treasury yields in recent weeks with the benchmark U.S. 10-year Treasury yield inching closer to 5%.
Traders in the equity options market have responded by lapping up defensive options contracts, with VIX call options -contracts that offer protection against a market pullback - drawing buyers.
On Friday, some 400,000 VIX call options changed hands by 12:30 p.m. (1730 GMT), at 1.5 times the usual pace, according to Trade Alert data.
“The market has a decidedly risk-off tone,” Mark Hackett, Chief Market Strategist at Nationwide, said in a note.
“The tone of the market and the behavior of investors have seen a notable shift,” he said.
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