Alto, Fractyl Go Public in Back-to-Back Offerings as IPO Market Heats Up

Joining the growing number of biotech initial public offerings this year are Alto Neuroscience and Fractyl Health, with both announcing respective plans to go public Friday morning.

Alto is putting a little more than 8 million shares of its common stock up for sale at $16 apiece, with plans to yield gross proceeds of $128.6 million, before taking out commissions, underwriting discounts and other offering fees. Underwriters also have 30 days to buy more than 1.2 million shares of Alto’s common stock at the initial public offering (IPO) price. The IPO is expected to close on Feb. 6.

Alto’s upsized IPO is higher than its previous target, which it revealed earlier this week to be $89 million to $103 million.

Alto will make its debut on the New York Stock Exchange on Friday under the ticker symbol ANRO.

The IPO proceeds will help the California-based biotech to fund the development of its lead asset ALTO-100, an oral small molecule inhibitor of BDNF, which is currently in a Phase II study for major depressive disorder. Alto will also use the earnings to advance its other depression asset ALTO-300, as well as the Phase I PDE4 asset ALTO-101, being trialed for neurodegenerative and neuropsychiatric conditions.

William Blair, Stifel, TD Cowen and Jefferies acted as joint book-running managers for Alto’s IPO, while Baird is the lead manager.

Massachusetts-based Fractyl Health also announced its IPO plans, putting some more than 7.3 million shares of its common stock up for sale at $15 apiece. Fractyl is looking to secure gross proceeds of around $110 million, which could further increase if underwriters take their 30-day option to snap up nearly 1.1 million additional shares of Fractyl’s common stock.

Like Alto, Fractyl’s gross IPO haul exceeded its initial expectations, which earlier this week was set at $99 million. The company will debut on the Nasdaq Global Market on Friday, with the ticker symbol GUTS.

Fractyl’s lead product candidate Revita is an outpatient endoscopic procedural therapy that uses hydrothermal ablation to remodel the dysfunctional duodenal lining to restore metabolic health. Revita is in a pivotal study for insulin-treated type 2 diabetes, with data expected in the fourth quarter of 2024.

Its second investigational asset is Rejuva, an adeno-associated virus-delivered gene therapy to improve islet health in the pancreas. Rejuva is currently in preclinical development.

Evercore ISI, Morgan Stanley and BofA Securities are joint book-running managers for Fractyl’s IPO.

Alto and Fractyl follow in the footsteps of CG Oncology, which last week announced its upsized IPO of $380 million, and ArriVent Biopharma, which followed a day later with its own $175 million offering.

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