Employees of Certara, a provider of biosimulation software that went public Friday, have a reason to rejoice. Roughly 900 Certara staffers received stock in the initial public offering, according to CEO William F. Feehery.
“There are a lot of happy employees around the world,” Feehery told Barron’s. “People put their whole careers to getting us to this point. It’s exciting and appropriate that they get to participate in the share ownership and the IPO.”
Feehery made the comments after Certara’s (ticker: CERT) shares soared as much as 72% to $39.50 in their first day of trading. The stock opened at $29.90 and closed Friday at $38.08, up nearly 66%.
Certara isn’t the only company that went public Friday. AbCellera Biologics (ABCL), 4D Molecular Therapeutics (FDMT) and Vivos Therapeutics (VVOS) also opened for trading.
Certara’s strong performance came after the company raised about $668.3 million. It sold 29,055,000 shares at $23 each, up from the 24,390,000 shares at $19 to $22 Certara had planned to sell. Jefferies, Morgan Stanley and BofA Securities are lead underwriters on the deal.
Certara, which isn’t a biotech, provides biosimulation software to create virtual trials that use virtual patients to predict how drugs behave in different people. Its platform is used by more than 1,600 biopharmaceutical companies and academic institutions across 60 countries, including all of the top 35 biopharmaceutical companies, its prospectus said.
“It’s a computer simulation of what is going in the body when a drug is dosed into the model,” Feehery said.
Biosimulation software became more important after the Covid-19 pandemic disrupted clinical trials, which often use human test subjects, across the world in 2020. For example, the coronavirus outbreak caused Pfizer (PFE) in March to delay patient recruitment in new and ongoing global trials, Reuters reported. Covid-19 is expected to drive adoption of software to lessen the disruption of future trials.
Certara was working on some clinical trials that were disrupted by Covid-19, Feehery said. “[The pandemic] didn’t affect our company as much because as that was happening a lot of Covid-related projects started,” Feehery said. Certara has worked on more than 24 Covid-related projects year-to-date, he said.
Certara is backed by private-equity firms. Swedish private-equity firm EQT (EQT) will own about 49% of the company after the so-called green shoe is exercised. Arsenal Capital Partners will have 7.3%, the prospectus said. “Working with them has been really good,” Feehery said. “They have a lot of belief in the long term opportunity for the company.”
Certara plans to use the proceeds from the IPO to invest in biosimulation innovation, launching new products and features, Feehery said. “The IPO proceeds will allow us to do that much faster and allow us to make a broader impact on worldwide drug development as we move into the future,” he said.
Certara has been acquisitive, buying 12 companies in the last eight years. Nine of those deals were software acquisitions and all were very successful, Feehery said. Certara is “always interested” in M&A but didn’t launch the IPO for any specific acquisition, he said. “We love the fact that we have the capability to invest internally and externally,” Feehery said.
Write to Luisa Beltran at [email protected]
