Novo-backed MapLight valued at $787 million after shares jump in Nasdaq debut

By Arasu Kannagi Basil

Oct 27 (Reuters) - MapLight Therapeutics MPLT.O debuted on the Nasdaq on Monday with a valuation of $787 million, becoming the first company to go public under a rarely used regulatory provision since the start of the U.S. government shutdown.

Shares of the Redwood City, California-based company, which is developing treatments for central nervous system disorders, opened at $19 apiece, nearly 12% above the initial public offering price of $17.

With the U.S. Securities and Exchange Commission closed due to the government shutdown, more than half a dozen companies have tapped a provision that allows registration statements to automatically become effective 20 days after filing, rather than wait for the regulator's approval.

MapLight, backed by Novo Nordisk's controlling shareholder Novo Holdings, raised $250.8 million in the IPO by selling 14.75 million shares. Affiliates of Wall Street giant Goldman Sachs GS.N bought 476,707 shares of MapLight in a concurrent private placement.

The company's lead experimental drug candidate, ML-007C-MA, is currently being developed in mid-stage studies to treat schizophrenia, and hallucinations and delusions caused by the Alzheimer's disease.

BIOTECH THAW

Biotech IPOs are also making a nascent comeback after a months-long dry spell. The sector has been grappling with regulatory uncertainty and poor returns, side-lining many would-be issuers.

LB Pharmaceuticals LBRX.O, which debuted last month, was the first U.S. biotech to raise more than $50 million in an IPO since February. Drug developer Evommune is expected to go public next month.

"The biotech IPO market is slowly thawing but it remains constrained by the many 2021-2023 debuts that are still trading below their offer price," said IPOX Research Associate Lukas Muehlbauer.

"This challenging environment makes it especially difficult for early-clinical stage firms to convince investors, who are demanding proof-of-concept with later-stage data."

Optimism around further rate cuts by the Federal Reserve has also boosted sentiment, with the S&P Biotech ETF XBI.P gaining more than 20% this year.