Latigo’s successful IPO boosts Conejo Valley
The success of the Conejo Valley’s burgeoning biotechnology and life sciences scene was boosted after Thousand Oaks-based Latigo Biotherapeutics, in its Aug. 6 initial public offering, raised $345.6 million, exceeding its initial fundraising expectations.
Originally, the company expected to offer 16 million shares between $16 and $18 apiece. In the final offering, Latigo sold 19.2 million shares at $18 per share, with the potential to raise more than $50 million more, as underwriters have a 30-day option to purchase up to an additional 2.88 million shares of common stock at the public offering price.
Brent Reinke, a partner at Stradling Law, told the Business Times that Latigo’s raise is “positive for the 101 biotech corridor.”
“This raise definitely brings attention, especially when they are successful, as this one has been. With expanded funding, you hope it’ll cause them to increase hiring and all of that is really good for the region,” Reinke said.
The raise is also a sign of how, nationally, the biotechnology and life sciences scene is coming back to life.
“Latigo’s IPO success is reflective of the more positive things going on in the industry nationally,” Reinke told the Business Times Aug. 11. “It has been rough the last few years, not as many IPOs and really just difficult for life sciences companies to obtain funding, but this year that has really been improving.”
Having worked in the industry for more than a decade, Reinke said, historically, this industry is “up and down.”
“Frankly, we have seen the down cycle the last several years, so you expected it to come back up, and it is,” Reinke said.
Latigo is a biotech company developing non-opioid pain medicines. Latigo’s two lead treatments include LTG-001 and LTG-305. Both are oral treatments that are selective Nav1.8 inhibitors. Nav1.8 inhibitors are compounds that block the Nav1.8 sodium channel, a tetrodotoxin-resistant voltage-gated sodium channel primarily expressed in the peripheral nervous system, which plays a crucial role in pain signaling.
LTG-001 is to treat acute, or sudden, short-term pain at its source, while LTG-305 is meant to treat chronic pain. The money will go mostly toward funding these treatments and getting them through trials.
Reinke, who said he is not extremely familiar with Latigo, said it is a positive sign to see the company do well with a successful raise.
“It’s important to note that our area has been struggling with what’s happening nationally, so it is great to see a successful, regional IPO go out,” Reinke said.
The successful raise is also important for Latigo’s investors, Reinke said, which include Westlake Village BioPartners. Founded by Beth Seidenberg and Sean Harper in 2018, the firm has raised $1.3 billion in hopes of incubating and growing early-stage next-generation biotechnology companies in the Conejo Valley and Los Angeles.
It has invested in a slew of companies in the region and Reinke said exits are important for VC firms like it because it frees up liquidity to invest in newer companies.
“It just causes more investments to be created and they make an active effort to invest in companies in our region and hopefully we see more over the next 6 to 12 months,” Reinke said. “Obviously I hope we see more IPOs or frankly even acquisitions of earlier-stage life sciences companies over the next year or so, but overall this is just encouraging to see.”
Thousand Oaks City Manager Drew Powers told the Business Times via email that Latigo’s IPO “demonstrates the depth of the biotech ecosystem that has developed in Thousand Oaks.”
“Amgen helped establish the foundation here decades ago, and today we are seeing new companies form, attract significant investment, advance important science, and grow right here in our community. That is exactly the kind of economic development cycle we have been working to support in our city,” he said.
Reinke agreed that there is a good amount of diversity in the region.
“Despite being more pharma-based than medical-device-based, there is a good diversity of life sciences across the three verticals of the industry and I think it’s positive because if you’re having issues in pharma, it’s good to have a level of diversity,” Reinke said.
Shares of Latigo began trading on the Nasdaq Global Select Market on Aug. 7 under the stock ticker “LTGO.” Goldman Sachs & Co. LLC, Jefferies, Leerink Partners and Guggenheim Securities are acting as joint book-running managers for the offering.
Shares closed at $19.38 on Aug. 12, about 7.7% above the $18 IPO price. Executives from Latigo could not be reached for comment as the company is still in a quiet period.
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