Following the catastrophic devastation of the Second World War, world leaders recognized the need to establish humanitarian principles amid the chaos of armed conflict. Thus sprouted the Geneva Conventions and accompanying protocols, forging a universal code of conduct for warfare. No longer would battling nations target innocent civilians but would instead take every reasonable precaution to limit collateral damage.
Such a shift in military ethos recently came to light when President Joe Biden revealed that he gave the green light for U.S. commandos to take out the top leader of ISIS. According to the president’s account, he demanded measures to avoid innocent bloodshed; thus, the Biden administration sent boots on the ground as opposed to a drone strike that could easily have resulted in indiscriminate civilian casualties.
Today, such precision military operations are the norm, not the exception. In a parallel manner, the modern approach to oncology similarly incorporates targeted therapeutics to address chronic conditions such as cancer. As the University of Utah mentioned, traditional solutions such as chemotherapy represent a brute-force attack: they may kill cancer, but they also risk killing the patient.
To remedy this obvious dilemma, advanced biotechnology firms like Arcellx Inc. are undertaking research and development for cellular therapies, helping the immune system fight cancer while avoiding interference with healthy cells.
What is Arcellx?
Pursuing a cure for cancer, Arcellx is a groundbreaking biotech firm offering a targeted cellular solution called D-Domain. A fully synthetic binding agent (scaffold) that is small, hydrophobic and stable, D-Domain leverages its unique structure to bind to cancerous or diseased cells. From there, the agent flags the cells in question for eventual destruction under a two-dose regimen.
Specifically, a medical professional injects SparX proteins that are composed of the antigen-binding D-Domain agents into a patient, which then attach to targeted diseased cells. In the second stage, the patient receives an infusion of Arcellx’s proprietary ARC-T cells, which bind to the SparX proteins. The integration activates the former agent, resulting in the termination of the diseased cell while leaving healthy cells alone.
When is the Arcellx IPO Date?
While the market for new listings slowed noticeably from 2021’s record-breaking year, the pharmaceutical industry has been among the dominant players for companies entering the public domain. Arcellx is set to launch its initial public offering (IPO) — the first time a private enterprise releases its equity shares to retail investors — on Feb. 4, 2022. The security will trade on the Nasdaq exchange under the ticker symbol ACLX.
Based on the initial terms of the deal, Arcellx disclosed its plans to distribute 8.25 million shares at an estimated price range between $15 and $17 per share. At the top end of the forecasted spectrum, the biotech firm would have raised $140 million. However, Arcellx eventually priced its IPO at $15, at the lowest end of the range.
With expectations calling for 33.54 million shares outstanding following the listing, the company would be worth around $503 million. Bank of America Corp. (NYSE: BAC), SVB Financial Group (NASDAQ: SIVB), Barclays (NYSE: BCS) and William Blair represent the lead underwriters.
As an IPO coming off a year when new U.S. listings commanded a valuation of over $301 billion — a searing record that exceeded the previous best of $168 billion in 2020 — Wall Street analysts will likely keep a keen eye on ACLX stock. Though investors could bid up IPOs again in 2022, it may be a tall order to duplicate last year’s resounding success.
One pivotal factor that has many sitting on the sidelines is the Federal Reserve. As Benzinga staff writer Wayne Duggan noted last December, the central bank projected three interest rate hikes occurring in 2022. However, Goldman Sachs Group Inc. (NYSE: GS) recently made waves when analysts there suggested they were anticipating up to five rate hikes.
Apparently not to be outdone, Bank of America analysts disclosed fears about seven hikes, “adopting one of the most aggressive views on Fed tightening among major banks” per a Reuters report. Either way, the consensus is clear: major institutions anticipate a hawkish monetary policy, one designed to release pressure from various asset bubbles.
However, such a strategy shift will disincentivize risk-on assets — such as ACLX stock — as investors rotate their funds into safer, dividend-yielding opportunities. Under this scenario, a promising albeit aspirational biotech company may have trouble courting additional capital.
Arcellx Financial History
Generally speaking, great risks may yield great rewards. Essentially, this aphorism is the underlying financial motivation for aspirational biotech firms like Arcellx. It’s not an unreasonable one either, with Grand View Research conducting analysis that projects the global biotech market to reach a valuation of $2.44 billion by 2028. Such a tally translates to a compound annual growth rate (CAGR) of 15.83% from 2021 to the end of the forecasted period.
Interestingly, the research firm also stated that the “DNA sequencing technology segment held the second-largest share in 2020 owing to its growing penetration in the development of precision medicines.” As global communities gradually control the COVID-19 pandemic through vaccinations and mitigation protocols, more resources shifting toward chronic conditions will likely boost precision therapeutics, presenting a favorable environment for ACLX stock.
However, one of the biggest challenges for early stage biotech firms is securing funding. Unavoidably, advanced pharmaceutical solutions involve a complicated business and a long and uncertain path to profitability. Moreover, outside risk factors such as clinical, regulatory and commercial headwinds represent minefields for this IPO category.
On the positive front, ACLX stock enjoys solid financial support. According to data from Crunchbase.com, Arcellx accrued $200 million through three private-equity funding rounds across 24 investors. Most recently, it raised $115 million on April 13, 2021, a round that CAM Capital and Samsara BioCapital led.
Furthermore, Arcellx’s lead product candidate, CART-ddBCMA, which seeks to address relapsed or refractory multiple myeloma, is presently undergoing a Phase I study. Also, the Food and Drug Administration (FDA) has granted the candidate Fast Track, Orphan Drug and Regenerative Medicine Advanced Therapy designations.
Despite the promising nature of Arcellx’s targeted therapies, investors must realize they are absorbing huge risks with ACLX stock. According to its IPO prospectus, the biotech has “no products approved for commercial sale.” As well, Arcellx hasn’t generated any revenue to date, incurring in management’s words “significant research and development and other expenses.”
With the acceleration of technology, military powers can eradicate specific nefarious actors while limiting (or even outright eliminating) civilian casualties. The core of ACLX stock — precision operations — underlines targeted therapeutics that eradicate diseased cells with minimal side effects, thus delivering positive health outcomes.
Should Arcellx’s solutions reach commercial success, they could offer broader benefits as well. For instance, the American Cancer Society reported that in 2015, the direct medical costs (total of all health care costs) for cancer totaled $80.2 billion. Cynically, improving outcomes for patients presents a potential win-win scenario: first, society saves on cancer-treatment costs and second, those who would have been in extended treatment could actively contribute to the economy.
Still, before you jump on board ACLX stock, you must realize that targeted therapeutic treatment is not a brand-new concept. Prior attempts in forwarding such solutions failed because of technical issues involving the inability to address variations of particular diseases.
But most problematic could be the cost issue. Almost certainly, novel therapeutics will not be cheap, which then brings up controversial ethical matters about who receives treatments and who goes without.
How to Buy Arcellx IPO (ACLX) Stock
Those interested in Arcellx must acquire shares at the open, necessitating knowing how to buy stocks. Below is a quick guide.
Step 1: Pick a brokerage.
With the best brokers competing on similar incentives, focus on finding the platform that ideally meets your needs.
Step 2: Decide how many shares you want.
IPOs are inherently risky, especially early stage biotechs. Therefore, choose a balanced share count.
Step 3: Choose your order type.
Before trading, learn these market concepts.
- Bid: The buyer’s best offer for a stock.
- Ask: The seller’s lowest acceptable price.
- Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
- Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
- Market order: Market orders guarantee fulfillment but only at the current rate.
- Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
- Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.
Step 4: Execute your trade.
Follow these steps to execute a market order:
- Select your action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the Buy (or Sell) button.
Follow the same sequence for limit orders (but include your execution price).
ACLX Restrictions for Retail Investors
Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t engage if you have privileged information.
Unfortunately, no pre-IPO opportunity is available for ACLX stock.
Cancer and Your Wallet in the Crosshairs
In almost any context, targeted solutions are superior to a brute-force attack. In Arcellx’s case, success in its precision therapies translates to positive patient outcomes. At the same time, this sector is among medicine’s most complicated, thus necessarily inviting high risk.
About Joshua Enomoto
His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.