Inside cardiovascular biotech Kardigan’s June IPO

Brianne Puglisi has been part of three IPOs, but Kardigan’s initial public offering in June was her first one as a CFO.

The prior experience, she said, helped her lead cardiovascular biotech company Kardigan to gross $460 million in IPO proceeds and see a 38% first-day pop in share price. Puglisi is not a clinician or a scientist, though, something she recognizes is unique in biotech.

“I started my career at KPMG—I was based out of their New York City offices—and I was working mostly on Fortune 500 clients across a number of different industries. And what drew me to the life sciences sector was really the chance to be part of this ecosystem…working with people who are pursuing much-needed therapies for patients,” she said.

Puglisi told CFO Brew how she communicated with the “super sharp,” highly educated investors in biotech about the company’s three cardiovascular therapies and why public markets were the better funding mechanism for such a young company.

How did the prior two IPOs you worked on inform how you approached the Kardigan IPO?

I think one of the biggest challenges, which is certainly a challenge for Kardigan, was telling a multi-program story clearly. Take Kardigan’s profile, for example: We are not a single asset biotech. We needed investors to understand three late-stage [clinical] programs, not just one, and that took a lot of time and repetition. Having that foresight and knowing the effort that would be involved to engage with the investor community at the right time, [we had to] start telling the story in a way that would resonate. It’s something that experience teaches you.

The biotech investor community—whether you’re talking to a subset of healthcare specialists that are hedge funds, or even within the large mutual fund complexes—you’re most likely talking to PhDs and MDs, and/or people who have been in thise space for decades. They’ve seen science evolve across every therapeutic area, so super sharp people [who], first and foremost, want to understand the science and how these medicines may help patients. The way you take that and translate it into more of the quantitative metrics is just making sure the investors understand the opportunity and want to invest…There’s a patient population that could eventually benefit from these medicines, which is helping investors model out and assign a probability of success to our programs.

How did Kardigan decide an IPO was the right route for raising capital? What fundraising happened earlier to enable the IPO?

Our capital strategy from day one—and I joined the company shortly after it was formed, so this was truly at the outset—was eventually accessing the public markets. Funding three late-stage programs in parallel takes a scale of capital that’s best supported by being public. We really needed to work to attract certain long-oriented investors, and most of them really live in the public markets, so it’s just matching the type and profile of investor with the quantum of capital, and the best way to do that in biotech is via the public markets.

Our Series A was a $300 million round—that’s where, even at the outset, we started with long-oriented investors. We had Perceptive Advisors, Arch Venture Partners, and Sequoia Heritage in the Series A. Perceptive and Arch are both healthcare specialists, and Sequoia is more of a generalist fund, a generalist PE fund, actually. Then we went on last fall to raise a Series B, where we took in a little over $250 million and added Fidelity and T. Rowe [Price] to the cap table, which was an important signal to the market as we were heading public that we had mutual fund interest and mutual funds in our cap table.

The first hundred days post-IPO are crucial. What’s on your mind right now?

Resource allocation is top of mind. We want to make sure we are really supporting the advancement of our clinical-stage pipeline to get to the data inflection points that are going to inform how our medicines are working and de-risk the pipeline to get to the next stage, and ultimately [new drug applications] across all three of the indications [specific diseases or treatments] that we’re studying these medicines in, and excitingly, we are expecting data coming from the entire pipeline, so across all three programs in the first half of next year.

Near term, resource allocation to make sure we’re allocating our capital, hit[ting] those milestones as efficiently and effectively as possible, and then from a Street perspective, just educating the market on what to expect in those data readouts that will occur in the next 12 months.