Friday, January 27, 2012

Verastem IPO prices at $10 a share

By Julie M. Donnelly, Boston Business Journal

Verastem Inc. will start trading on the Nasdaq, Friday, having completed an IPO that raises $55 million and values the one-year-old, venture-backed biotech at over $120 million, according to a filing with U.S. regulators.

The startup, focused on therapies targeting cancer stem cells, is headed by serial entrepreneur Christoph Westphal. Verastem will trade under the ticker symbol VSTM. UBS Investment Bank and Boston health care investment bank Leerink Swann LLC are acting as joint book-running managers for the offering. Lazard Capital Markets LLC, Oppenheimer & Co. Inc. and Rodman & Renshaw, LLC are acting as co-managers for the offering.

The underwriters also have an option for a period of 30 days to purchase up to an additional 825,000 shares of common stock from Verastem to cover over-allotments, if any. The company has not yet launched clinical trials but plans to target breast cancer with its lead product.

Verastem announced its plans to go public in November 2011, initially hoping to raise $50 million. Later that month, the company raised $20 million through a Series C equity placement, which brings the total invested in the company to approximately $68 million. Verastem noted in its S-1 filing for its planned IPO that it would be closing a Series C round in November, and that some of its financials - including total equity value as of Sept. 30, 2011 - reflected that anticipated fundraise.