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CG Oncology IPO Soars 96% on Day 1

CG Oncology Inc. believes it has developed the right treatments for bladder cancer. So does Wall Street.

Shares of the Irvine-based cancer researcher increased 96% on Jan. 25, its first day as a publicly traded company (Nasdaq: CGON).

The company originally planned to raise $201 million by offering 11.8 million shares at a price range of $16 to $18, valuing its midpoint at about $1 billion, according to a Jan. 18 filing.

It ended up upsizing those plans because of heavy investor interest, increasing the offering to 20 million shares at $19 each, raising about $380 million.

Shares in the company opened at $29 and continued going up, reaching as high as $40.90 before ending the day at $37.17 and a $2.1 billion market cap.

CG Oncology’s IPO marked the first big public offering in the U.S. this year, and is the largest IPO for an Orange County-based firm in over two years.

Life Savers

The debut on Wall Street confirms the arrival of a new medtech star—33-year-old Chairman and Chief Executive Arthur Kuan. While he wasn’t available for comment last week due to quiet period restrictions, Kuan previously told the Business Journal that he has a personal interest in solving cancer, having lost his father to pancreatic cancer.

“We are trying to save people’s lives,” he said. “We’re looking forward to growing the company.”

HK Investor

CG Oncology had already secured more than $300 million since its founding in 2010 to find solutions to bladder cancer, making it one of Orange County’s better-funded life science companies. It was only last August when the company completed a crossover Series E oversubscribed fund to raise $105 million.

The IPO also highlighted Hong Kong investor Simone Song, a venture capital exec who was the head of healthcare investment banking for Greater China for Goldman Sachs.

Song, currently the largest individual investor with a 9.5% stake currently worth an estimated $350 million, has previously called the company treatment a “game changer” for bladder cancer. In a December post on her LinkedIn page, Song, who has been on the board since 2015, credited her father for a 2004 paper on treating cancer with viruses.
“It has been a hard but incredibly rewarding journey,” she wrote in a December post on LinkedIn.

The biotech could still bring in more money from its offering, as underwriters have 30 more days to pick up an additional 3 million shares of its common stock.

Goldman Sachs as well as Morgan Stanley are joint book-running managers for the offering, while LifeSci Capital is serving as its co-manager. The San Diego offices of Latham & Watkins and Cooley LLP are the company’s legal teams for the IPO.

CG Oncology’s Nasdaq debut last week opens this year’s batch of IPOs, with about half a dozen other biotechs expected to go public.

Breakthrough Status

The IPO follows two good pieces of news for the company, whose lead therapy is called cretostimogene grenadenorepvec, or CG for short.

About 50 of the 66 evaluable patients in a Phase III trial showed no evidence of bladder cancer at any time after the administration of the CG treatment, the company revealed in interim data presented at the 24th Annual Meeting of Society of Urologic Oncology in November.

In December, the Food and Drug Administration granted both Fast Track Designation and Breakthrough Therapy Designation to CG Oncology.

About 725,000 people in the U.S. have bladder cancer, making it the sixth most prevalent cancer in the country. The American Cancer Society estimated about 17,000 died last year from the disease and 82,000 people annually are diagnosed with it.

A bladder cancer patient has limited options. Either the bladder must be removed or repaired, which has a high fatality rate, or medications are administered. Medications often have problems because the bladder, as would be expected, urinates out the anti-cancer drugs.

It’s a disease that is costly to the healthcare system because of an intense follow-up schedule for patients. Up to 50% of high-risk patients will see symptoms recur within a year.

In contrast, CG’s “oncolytic immunotherapy” uses genetically modified viruses to target tumors in the bladder.

Last July, the company announced completion of enrollment for its BOND-003 study, which is evaluating CG in patients with high-risk non-muscle invasive bladder cancer. About 110 patients are enrolled across North America and the Asia-Pacific regions. That trial is expected to have results at the end of this year, the filing said.

“We intend to become a leading company in the development and commercialization of innovative therapeutics to treat cancer, with an initial focus on bladder cancer,” the company’s registration statement said.

Kuan, who has a master’s degree in biotechnology from John Hopkins University, was a founding member of Ally Bridge Group, a global healthcare-focused investment platform. Kuan began his career in an operational role at Dinova Capital, a Shanghai-based, medical technology incubator fund, evaluating medical device investment opportunities.

The company is based out of the 400 Spectrum Center office tower, though much of its employee base works remotely, it says. The company’s employee headcount was 61, with plans to double in the coming years.

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Sonia Chung
Sonia Chung
Sonia Chung joined the Orange County Business Journal in 2021 as their Marketing Creative Director. In her role she creates all visual content as it relates to the marketing needs for the sales and events teams. Her responsibilities include the creation of marketing materials for six annual corporate events, weekly print advertisements, sales flyers in correspondence to the editorial calendar, social media graphics, PowerPoint presentation decks, e-blasts, and maintains the online presence for Orange County Business Journal’s corporate events.
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