(Reuters) - Shares of SoftBank-backed Vir Biotechnology Inc (VIR.O) fell as much as 28% in one of the worst market debuts in recent months, adding to the gloom in the IPO market after WeWork’s failed attempt to list its stock.
Vir’s disastrous IPO deals another blow to Japan’s SoftBank (9984.T), which is still smarting from the botched initial public offering of WeWork last month following increased investor skepticism regarding the office-sharing startup’s path to profitability.
Investors and experts tracking recent IPOs believe companies thinking of going public in the next 12-18 months would be extremely wary of the recent backlash against loss-making firms.
Vir posted revenue of $10.7 million for 2018, a nearly four-fold jump from a year earlier, but its losses also ballooned by 66% to roughly $116 million in the same period.
Shares of the San Francisco-based infectious disease researcher opened at $16.15 after its initial public offering was priced at the low end of its $20 to $22 per share price range. It raised $142.9 million from the offering.
At the day’s low of $14.17, the company was valued at slightly over $1.5 billion.
Vir researches new therapies for infectious diseases such as hepatitis, tuberculosis and HIV, and counts some of the most high-profile investors in the industry among its backers.
Co-founded by Arch Venture Partners’ Robert Nelsen, both SoftBank’s Vision Fund and the Bill & Melinda Gates Foundation are among its biggest backers. Biogen Inc’s (BIIB.O) former Chief Executive Officer George Scangos is its CEO.
JP Morgan, Goldman Sachs, Cowen and Barclays are among the lead underwriters for Vir’s IPO.
Reporting by C Nivedita and Abhishek Manikandan in Bengaluru; Editing by Shailesh Kuber and Anil D'Silva