There is a cliché in business that you are never wrong…just early. Success is influenced and, in many scenarios, dependent upon a company having the right solution at just the right time.
This is especially true in industries defined by innovation, such as life sciences and technology. Think Friendster – a pioneering social network that paved the way for Facebook. Or Ask Jeeves, which was a pre-Google search engine that attempted to bring order to the chaotic Internet.
REGENXBIO CEO Ken Mills contemplated timing this month during an exclusive Q&A at the ACG National Capital Mid-Atlantic Growth Conference, held at the Hyatt Regency Tysons Corner Center in Northern Virginia. An innovator in the area of gene therapy, REGENXBIO moved rapidly during the past 18 months from early stage funding to a successful $160M initial public offering led by Morgan Stanley and Bank of America.
“For years we had little success raising capital from investors,” Mills explained to an audience of more than 300 corporate dealmakers, private equity partners, M&A advisors and commercial bankers. “There was little understanding of gene therapy and the specter of the 2008 market crash weighed heavily on private equity funds and venture capitalists.”
Mills said the company was sustained through a series of grants from the National Institutes of Health (NIH), as well as the capital invested by the founding team. Yet, the ability for REGENXBIO to realize its potential was muted at best.
Then, the timing got right. The catalyst was a New England Journal of Medicine article about a gene therapy trial for a small group of hemophilia patients that utilized REGENXBIO’s technology.
The resulting interest in gene therapy and validation of REGENXBIO’s leadership generated significant and sustained interest in the company in the private equity community. In 2015, the company raised $100M in capital in two financing rounds.
REGENXBIO hired a Chief Medical Officer. The company moved to larger offices. Mills thought the capital was in place to carry the company forward. The timing got better.
“A number of our investors suggested we initiate conversations with investment banks to explore an initial public offering,” Mills said during his Q&A on stage at the Growth Conference. “It was a fast and furious process with a lot of learning on the go. Our leadership team had to make decisions quickly to take advantage of what seemed to be ideal market conditions.”
On the Tuesday after Labor Day in 2016, Mills boarded a private jet for a roadshow that would take him to the offices of nearly 20 institutional investors a day. The public offering was well received with REGENXBIO stock issued at $22 per share.
“Most of the investors who participated in the public offering are people we trust and who share our company’s vision for gene therapy,” Mills said.
What has changed now that REGENXBIO is public with a market cap of $500M?
“We have used the proceeds of the IPO to initiate clinical trials with patients,” Mills explained. “We’re also focused on making exceptional hires to build out the team that can deliver on the promise of gene therapy.”