Seattle Biotech CEO Keeps a Watchful Eye on the Market for Potential IPO
Megan Campbell, Puget Sound Business Journal
May 12, 2020
Seattle biotech CEO Shawn Iadonato, who said last year that he wanted to take Kineta public, is keeping a close eye on the market.
Iadonato said the biotech still aims to raise crossover funds this year with the goal of doing an initial public offering, but he has not specified a timeline for when that happens.
“The company will continue to prepare to go public,” he said. “We’re really watching the capital markets closely. There’s been continued strength in the biotech sector relative to other sectors, and we expect that will continue even despite the current environment.”
Kineta focuses on developing technologies that address unmet patient needs in three areas: immuno-oncology for cancer treatments, neuroscience for non-opioid pain treatments and biodefense for antivirals.
Kineta is laying the groundwork for a potential IPO with a non-specified $5 million funding round that was announced last week. The funding, which closed in early March before coronavirus seized the economy, will primarily be used to support a preclinical immune-oncology program that targets the VISTA protein in Kineta’s pipeline.
Furthering this program, in addition to Kineta's partnerships with Genentech and Pfizer, will help the company gain institutional investor support for an IPO, said Jacques Bouchy, senior vice president for business development and corporate communications. Bouchy said a key component to going public will be when there's enough of an "investor appetite" for buying Kineta's stock, driving up the cost.
The Bellevue-based Schlaepfer Family Foundation led the recent funding round with a contribution of $1.5 million, said Phil Schlaepfer, who professionally goes by Phil Scott. Scott, who has worked as an advisor at Merrill Lynch Wealth Management for the past 35 years, formed the family foundation a year ago.
Scott has been a small investor of Kineta for about five years. He was particularly interested in Kineta’s chronic pain, opioid-free drug being developed in partnership with Genentech.
“There are 38 million people who live with chronic pain and many are addicted to opioids,” Scott said. “With that size of a market, there’s an enormous amount of potential for Kineta.”
Scott believes it's too soon for Kineta to go public, adding that its science is very cutting edge.
“The decision to go public – and the determination on timing – rests entirely with Kineta’s leadership," he said. "I believe the company is very strong today, and it could be even more successful in the future if they continue to fortify their technology before taking the company public.”
While investing in Kineta is not tied to the market, Scott said it’s a good time to invest in general.
“The thing that’s important to remember and understand is the fundamentals of the market versus the fundamentals of the economy,” he said. “The fundamentals of the market are good when the economy is bad, when everyone’s sold and when there’s a lot of hedging.”
He added that the “fundamentals of the market today are phenomenal.”
“As an investor, you need to distinguish between those two and remember that you invest in the market, not the economy,” he said.