Centessa Hits the Market in 3rd Biggest Biotech IPO of the Year

Company formed from 10 small drug companies

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Barry Cohen
Jun 08, 2021

Summary

  • U.K.-based Contessa raises $330 million in IPO
  • Venture investor Medicxi lead backer of life sciences company
  • Contessa model gives individual companies R&D autonomy
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If two heads are better than one, consider what 10 can accomplish. That’s the thinking behind Centessa Pharmaceuticals (

CNTA, Financial), a company constructed from the merger of 10 small drug companies. U.K.-based Contessa recently went public at $20 a share, raising $330 million in one of the largest biotech IPOs this year.

Formed by U.K. venture investor Medicxi, Centessa is also backed by General Atlantic, Vida Ventures, Janus Henderson Investors and a dozen other firms: General Atlantic, Vida Ventures, Janus Henderson Investors, Boxer Capital, Cormorant Asset Management, T. Rowe Price Associates, Inc., Venrock Healthcare Capital Partners, Wellington Management Company, BVF Partners L.P., EcoR1 Capital, Franklin Templeton, Logos Capital, Samsara BioCapital, LifeSci Venture Partners and a U.S.-based healthcare-focused fund.

Medicxi is focused on the life sciences, according to the company’s website. It manages the Index Ventures Life Sciences portfolio. Investors include GlaxoSmithKline (

GSK, Financial), Johnson & Johnson (JNJ, Financial), Novartis (NVS, Financial) and Verily, an Alphabet (GOOG) (GOOGL, Financial) company.

The Contessa model allows the individual companies the autonomy to concentrate on their own R&D goals, with the financial resources provided by the parent.

"The playbook of 'asset centricity' has worked well for single-asset biotech companies," Centessa CEO Saurabh Saha told BioPharma Dive in February. "We asked ourselves the question, 'Can we scale this company to that of a larger pharma company?'"

All told, the 10 companies have 15 programs in development, four of which are in clinical testing. They cover a broad spectrum of diseases, including hematology, immunology, inflammation, and neuroscience.

The $330 million raised by Contessa is the third-highest total for biotechs so far this year. At the top of the list are Sana Biotechnology's (

SANA, Financial) $588 million IPO and Recursion Pharmaceuticals' (RXRX, Financial) $436 million offering. Since their public debuts, both stocks have faltered. Sana’s year-to-date high of $44.60 has been chopped in about half, and the shares can now be picked up for just under $23. Recursion has performed better, but at $27.71 is still well off its year-to-date peak of $35.78.

Investors’ ardor over newly public biotechs may be cooling. Sana and Recursion are two of 23 companies in the industry whose shares are trading below their offering price. Only 13 firms are higher. In its brief existence, Centessa has earned a spot in the latter group, up about $3 from its offering price.

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Disclosures

I am/we are Long JNJ
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