FibroBiologics goes public in direct listing

FibroBiologics, a biotechnology company based in The Medical Center, has now completed its direct listing of its stock. It’s the second Houston-area company to go public in the past week,  after Autonomix Medical.

The company chose to go public via a direct listing, rather than an Initial Public Offering. In a traditional IPO, a company goes through a lot of due diligence from the investment bank underwriting the IPO.  The bank agrees to support the IPO price with its own capital, if needed. The price of that trust is a time-consuming process and large fees for the underwriters.



In a direct listing, the company does not issue any new shares and doesn’t use an underwriter. It’s cheaper and quicker but the stock can be more volatile because investors have to do their own due diligence. It’s highly unusual for a biotech company to opt to go public via this route.

FibroBiologics was formed in 2021 and is developing treatment therapies that use fibroblasts. Fibroblasts and stem cells are the only two cell types in the human body that can regenerate tissue and organs.

The company believes that fibroblasts are favorable to stem cells in cell therapy treatments as they do not provoke an immune response and can be non-invasively harvested from a variety of skin donors. However, no fibroblast therapy products have yet been approved.

The company is concentrating on treatments for degenerative disc disease, Multiple Sclerosis and wound healing.

Management

Founder and CEO Pete O’Heeron is a Houston-based biopharma inventor with over 300 patents to his name. He also owned a country music record label for 15 years before closing it in 2019 to concentrate on medicine.

Mark Andersen has been the CFO since June 2022. He moved to Houston from Indianapolis where he was the CFO of the Indiana Biosciences Research Institute.

Opening Trading

Ahead of its direct listing, the company set the reference price at $8. The shares actually opened at $30 in mid-afternoon, before closing at $29.10. The company received no cash from the direct listing. [Update 02-02-24 – After three days of trading, the shares are now $15].

As of September 2023, the company had $10.8 million cash on hand, which should see it through September 2024.

S-1 filing – FibroBiologics

 

 

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