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Moderna to raise US$604m in upsized IPO, braving market jitters

[NEW YORK] Moderna Inc will sell around US$604.3 million in shares in its initial public offering (IPO), the biotech company said on Thursday, braving stock market jitters to sell more stock than originally planned.

In the biggest flotation of a biotechnology company since 2016, Moderna said it would sell roughly 26.3 million shares at US$23 per share. Moderna had originally planned to sell 21.7 million shares for between US$22 and US$24 per share.

Moderna is due to start trading on the Nasdaq on Friday under the ticker "MRNA".

The pricing was a good test of the IPO market as it came following another turbulent day in the U.S. stock market, amid investor concerns over the trade dispute between the United States and China.

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Cambridge, Massachusetts-based Moderna had scaled back its fundraising expectations in the run-up to the IPO in light of the stock market volatility, which makes for a more uncertain environment for new listings, a source familiar with the matter told Reuters earlier.

However, demand for the IPO was supported by a substantial amount of premarketing done with investors in preparation of the IPO, the source said.

Biotech IPOs have performed strongly this year, returning on average around 14 per cent in 2018 as of Nov 30, according to PricewaterhouseCoopers data, compared to a broadly flat S&P 500 Index year to date.

"Given the unique nature of these IPOs involving crossover investors, their strong returns, the rapid advances in science due to "Big Data" innovations and the expectation of big Pharma scooping up promising young companies, we expect the Pharma Life Sciences sector to keep leading the broader IPO market in 2019," said David Ethridge, US IPO services leader at PwC.

More IPOs of big, unlisted technology companies are expected. Earlier on Thursday, ride-hailing company Lyft Inc beat bigger rival Uber Technologies in filing for an IPO.

Moderna said its offering is expected to close on Dec 11 and that it has granted underwriters a 30-day overallotment option of 3.94 million shares.

Moderna develops messenger ribonucleic acid-based (mRNA) therapeutic drugs for infectious diseases and immuno-oncology, and has said it intends to use a major portion of the net proceeds on drug discovery and development.

Morgan Stanley & Co LLC, Goldman Sachs & Co LLC and J.P. Morgan Securities LLC are among the lead underwriting banks for Moderna's IPO.