Agios shares close up more than 70 percent on their first trading day after initial public offering
(Pat Greenhouse/Globe Staff
Shares of Agios Pharmaceuticals Inc. shot up 73.8 percent on their first day of trading Wednesday after the Cambridge company raised $105 million in an initial public offering.
Agios became the fifth Massachusetts biotechnology start-up to go public this year, following Enanta Pharmaceuticals Inc. and Tetraphase Pharmaceuticals Inc. of Watertown and two other Cambridge companies, Epizyme Inc. and bluebird bio Inc.
Six-year-old Agios has been working in the field of cellular metabolism to develop cancer-fighting therapies. But while its approach of starving cancer cells by blocking particular enzymes is considered promising, the company has yet to get a drug into a clinical trial.
Nonetheless, it disclosed late Tuesday night that it had priced about 5.8 million shares at $18 each. The offering exceeded company goals outlined in an earlier regulatory filing. At that time, Agios said it planned to sell 5 million shares at a range of $14 to $16 apiece.
Agios executives were unavailable to comment Wednesday. A spokesman said the firm was in a 25-day “quiet period” required by US regulators of newly public companies.
Its opening-day jump of $13.28 to a close of $31.28 on the Nasdaq stock exchange reflects an intensifying appetite by investors for shares of new biotechnology companies, even those in preclinical development, at a time when the broader stock market has been climbing.
Biotechnology shares have outpaced the general financial markets over the past three years and investors who have been on the sidelines are now looking to put their cash to work, said Kelly Babson, a partner in securities law at Boston law firm Nixon Peabody LLP.
“The biotech sector has performed pretty strongly,” Babson said. “As the more mature companies are trading at higher valuations, the earlier-stage IPO candidates have become more attractive alternatives for investors trying to capitalize on some of that upside.”
Agios, backed by an investment consortium led by Boston’s Third Rock Ventures, was co-founded by cancer metabolism specialists Lewis Cantley of Harvard Medical School in Boston, Tak Mak of the University of Toronto in Canada, and Craig B. Thompson, who formerly ran the Leonard and Madlyn Abramson Family Cancer Research Institute at the University of Pennsylvania and is now president of Memorial Sloan-Kettering Cancer Center in New York.
Last fall, Agios settled a pair of lawsuits with UPenn and its Abramson Institute, agreeing to enter into a collaboration in which the Cambridge company licenses intellectual property from the school. As part of the resolution, the university withdrew accusations that Agios and Thompson stole research he oversaw when he ran the cancer institute. Terms of the settlement were confidential and neither Agios nor Thompson admitted to wrongdoing.Robert Weisman can be reached at email@example.com. Follow him on Twitter @GlobeRobW.