Obesity Drugmaker Rivus Wants in on the Healthcare IPO Boom

Two is a coincidence, three is a trend. Here come all the trend-followers.

September marked one of the biggest months in years for healthcare IPOs, and Bloomberg reported Monday that obesity drugmaker Rivus is working with banks to complete a US public listing that could happen before the end of the year.

Health Makes Wealth

Rivus has good reason to be optimistic about its pipeline. Last week, the biotech firm published positive results for the phase 2 trial of its lead asset, a once-daily oral drug called HU6 that’s intended to help patients with obesity. While current leading anti-obesity drugs largely promote weight loss by sending signals to patients’ brains that affect their appetite, thus reducing caloric intake, HU6 is designed to boost the breakdown of fat in the body by preventing it from accumulating in the first place. The latest trial results, crucially, showed the drug helped patients lose weight while preserving muscle mass — an especially critical asset for patients suffering from obesity-related heart failure. 

The company also has plenty of reasons to be optimistic about a warm market welcome:

• Last month saw the successful debut of at least four biotech firms: Zenas BioPharma, MBX Biosciences, Bicara Therapeutics, and BioAge Labs (which is also developing weight-loss drugs). Shares of each firm are still trading above their initial listing price.
• So far this year, biopharma IPOs on US exchanges have raised $3.2 billion, according to data compiled by Bloomberg, more than was raised by the industry in the first nine months of 2023 and 2022.

Join the Club: Rivus may aim to raise more than $250 million, one source told Bloomberg. And it’s not alone in its rush to the market. Also eyeing an imminent IPO, according to a recent Reuters report: Upstream Bio, which is developing respiratory disorder treatments; Ceribell, which makes monitors to detect neurological conditions; and CAMP4 Therapeutics, which is developing therapies for genetic diseases. “(Biotechs) may want to capture the current market momentum rather than waiting for elections or economic indicators,” Zara Muradali, national industry managing principal of Grant Thornton’s life sciences industry practice, told Reuters.