Pharmaceutical company Eli Lilly (LLY) is reportedly planning to buy 4.9% of the shares outstanding of hair loss drug developer Veradermics when the startup company holds its initial public offering (IPO).
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Shares of Veradermics common stock purchased by Eli Lilly will not be subject to a lock-up agreement with the IPO’s underwriters, according to media reports. Veradermics is expected to price its IPO at the top end of a $14 to $16 range on Feb. 3.
Veradermics stock is expected to begin trading on the New York Stock Exchange Feb. 4 under the ticker symbol “MANE.” The company has said it is aiming to raise $200 million from the stock sale. The IPO is multiple times oversubscribed, indicating strong demand for the shares.
Eli Lilly’s Investment
Founded in 2019, Veradermics is a biopharmaceutical company based in Connecticut that’s focused on developing treatments for hair loss and various skin conditions. Its lead product candidate is an extended-release pill that treats hair loss in both men and women.
It is not immediately clear why Eli Lilly is interested in taking a large stake in Veradermics as part of the IPO. However, Eli Lilly’s investment appears to be viewed as a vote of confidence in MANE stock. Jefferies Financial Group (JEF), Citigroup (C), and Cantor Fitzgerald are the lead underwriters on the IPO.
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy rating among 19 Wall Street analysts. That rating is based on 17 Buy and two Hold recommendations issued in the last three months. The average LLY price target of $1,204.22 implies 17.51% upside from current levels.
