An eye-popping $720 million in proceeds and a $6.1 billion valuation? Yeah, that won't happen Thursday for WCG Clinical, the company's chief executive confirmed in a statement to Fierce Biotech.
The nine-year-old company, which offers trial help to biopharmas and CROs, is postponing its debut on the Nasdaq, Donald A. Deieso, Ph.D., executive chairman and CEO said. The company "may reevaluate in the future when conditions are more conducive to sharing our unique story and market opportunity," he added.
After filing for the customary $100 million IPO on July 1, WCG Clinical had aimed for $720 million in proceeds, the midpoint of the range set forth in a Securities and Exchange Commission filing dated Aug. 2. That would value WCG at about $6.1 billion after selling 45 million shares at $16 apiece.
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That's a hefty price tag for the Princeton, New Jersey-based company, putting it closer in value to CRO Parexel than newer players like Science 37, which tapped a blank check company to go public in May at a $1 billion valuation. Parexel got the big bucks last month when EQT and Goldman Sachs said they would dish out $8.5 billion in an acquisition.
In its regulatory filings, WCG revealed the price tags on its recent acquisitions. WCG bought VeraSci on July 20 for $330 million in cash to boost its trial capabilities for central nervous system disorder drugs. That was funded in part by a $140 million revolving credit facility.
The IPO proceeds would have been used to repay all outstanding borrowing from that $140 million credit facility. The remainder will go toward paying down other debts from the first lien loan.
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WCG also acquired medical imaging and cardiac safety lab services company Intrinsic Imaging in June. That deal, at a price tag of $80 million, was funded entirely by cash on hand and could include earn-outs totaling $12.1 million. WCG also used $36 million cash on hand to buy life sciences consulting firm Avoca Group in April.
Those are just three of the 31 acquisitions the 4,000-employee WCG has closed since 2012.
WCG made about $463 million last year, a 12% increase over 2019. For the three months ended March 31, 2021, WCG generated $137 million, a 33% jump year over year.
The COVID-19 pandemic, which is once again swelling with the spread of the delta variant, has had a big impact on clinical trials. WCG acknowledged in its prospectus that the pandemic could continue hampering the biopharma industry and its customers.
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WCG boasted that it supported 723 COVID-19 trials, including "many of the most highly impactful vaccines and antivirals." Across the company's entire portfolio, WCG-supported studies have enrolled about 2.5 million patients.
WCG had planned to trade under the symbol "WCGC."
Editor's note: This story was updated at 11:06 a.m. ET on Aug. 5 to include a statement from WCG's executive chairman.