Amid extraordinary difficulty, it’s incredibly hard (if not outright impossible) to see a silver lining. Regarding the COVID-19 pandemic, this concept now resonates almost universally. Unlike other disasters, the destruction wrought by the SARS-CoV-2 virus gave no consideration to class nor borders. Nearly everyone suffered an impact.
Still, if any one positive lesson can be extracted from these troubled waters, it’s that society’s biggest woes are not necessarily tied to overtly tangible powers and principalities but rather to enemies blind to the naked eye. Under a rational framework, the global health crisis should spark common bonds. Across myriad examples — such as the stories of courage from hurricane Harvey — the best of humanity rises in the worst of times.
While such productive dynamics may be lacking in the presently fractious environment, the fading urgency of the coronavirus pandemic will likely spark renewed focus on chronic and ongoing threats to personal health and wellness. For instance, insurance stocks might not just represent potentially profitable ideas because of their underlying stable businesses. Instead, they may now cater to renewed concerns about mitigating unknown variables.
Under the same spirit, the upcoming initial public offering (IPO) of Vigil Neuroscience, Inc., a specialist in neurodegenerative diseases, could command investor interest.
When Is the Vigil Neuroscience IPO Date?
Following a rip-roaring wave of new listings, questions surrounded the possible intensity of public market debuts so early in the new year. As far as the biotechnology industry is concerned, though, enthusiasm apparently remains robust.
Vigil Neuroscience will print its name on the IPO calendar on Jan. 7, competing directly against two other biotech firms with public ambitions on the same day: CinCor Pharma, Inc. and Amylyx Pharmaceuticals, Inc. All three feature similar financial backing, with their offering size in the nine-digit dollar range.
For Vigil, the biotech will feature the smallest of the Friday deals, with the Cambridge, Massachusetts-based company planning to raise $112 million through the distribution of 7 million shares. Management estimates that the rate per share will fall between $15 and $17. At the midpoint of the pricing spectrum, Vigil will command a fully diluted market value of $491 million.
Shares will list on the Nasdaq exchange under the ticker symbol VIGL. Morgan Stanley (NYSE: MS), Jefferies Financial Group Inc (NYSE: JEF), Stifel Financial Corp (NYSE: SF), and Guggenheim Securities represent the joint bookrunners for the IPO.
Although it’s encouraging to see that the appetite for new listings continues to load the buffet with a healthy stream of customers, prospective buyers of VIGL stock should consider both broad and sector-specific dynamics.
First and foremost are concerns about longer-term viability for IPOs. In the U.S., private-to-public transitions rang up a valuation tally exceeding $301 billion. This figure well exceeded the prior record of $168 billion in 2020, per data from Dealogic. Extending the range globally, new listings in 2021 raised over $594 billion. That such a fever-pitch enthusiasm will sustain throughout this year seems a far-fetched proposition.
Second, investors must be aware that the Federal Reserve intends to let the air out of the speculative bubble without capsizing the economy. The disclosure of the minutes for December’s Federal Open Market Committee meeting indicates that the central bank is deeply concerned about soaring consumer prices. If the subsequent hawkish policies significantly raise borrowing costs, the incentive for investors will be to rotate away from risk-on assets to risk-off assets.
Unfortunately, few investment categories are as risky as aspirational biotechs, let alone aspirational biotech IPOs.
Finally, VIGL stock will fly head-to-head against CinCor and Amylyx. Both present intense competition as the former, a high-blood-pressure mitigation specialist, offers the arguably more credible investment opportunity while the latter, an amyotrophic lateral sclerosis (ALS) therapeutic developer, competes in the same neurodegenerative disease space.
Vigil Neuroscience Financial History
Typically, what other new listings are on the billing are of little concern to a private firm going public. But with Vigil Neuroscience, the fact that it’s making its debut on the same day as Amylyx Pharmaceuticals presents an interesting conundrum, one that should inspire careful due diligence.
As mentioned above, Vigil will run its deal on the lowest end among the three end-of-week debutantes with a $112 million gross raise. On the other hand, Amylyx will raise $166 million (not too far off from CinCor’s $176 million IPO). Beyond that comparison, the end market value for the two firms will become conspicuously divergent. Vigil will command a $491 million valuation whereas Amylyx is looking at $1.1 billion.
Even within the financial details, Vigil’s profile might not appeal to certain investors. True, both biotechs fall under the aspirational (read speculative) category. However, Amylyx can at least lay claim to grant revenues or sales related to performing contracted research and development services. In contrast, Vigil is purely pre-revenue, meaning that retail backers depend largely on clinical progress.
To be fair, Vigil enjoys the more favorable of the net loss comparison, with the company in the red by $30.3 million in the three months ending Sept. 30, 2021. During the same period, Amylyx posted a net loss of nearly $60 million. However, without an eventual conversion of scientific acumen to commercial viability, both companies can end up in the trash heap of failed pharmaceutical innovators.
On this point, VIGL stock may be tied to a scientific edge. According to its website, Vigil is the “world’s first microglia-focused therapeutics company.” The significance here is that microglia, a specialized population of macrophages-like cells in the central nervous system, may be directed to orchestrate a potent inflammatory response, per research cited in the medical journal Frontiers.
Naturally, microglia-based innovations offer much hope especially in the area of brain protection and repair. Being that Vigil is the only firm working on this groundbreaking and potentially paradigm-shifting methodology, it leverages substantial clout.
However, the main challenge for prospective investors of VIGL stock is that the underlying company is still in the early clinical stages. Here, Amylyx has a clear advantage in that it initiated a Phase 3 trial of its core product. Therefore, the majority of market participants may choose to go with the more established biotech, putting VIGL in a tough spot.
Vigil Neuroscience Potential
One of the reasons why the 1918 influenza epidemic was much more devastating on a per-capita basis than the current COVID-19 pandemic was the development of the messenger-RNA vaccine. Unlike live-attenuated or viral-vectored vaccines, the mRNA approach cannot cause the infection for which the underlying vaccine is meant to address — which is a limited risk factor for the live-attenuated counterpart.
Put another way, after more than a century of research and development, the pharmaceutical industry has overcome challenges that prior generations could only fantasize about. Thus, while the journey to find cures for neurodegenerative diseases is littered with failures, the evolution of medicine suggests that a breakthrough will occur at some point.
With the exciting technology behind microglia-based therapies, it’s possible that Vigil Neuroscience holds the key to a much-hoped-for discovery.
At the same time, neurodegenerative diseases have been difficult to address over the decades. What’s more, microglia-based therapies are not yet 100% safe, with their malfunctions having the potential to “destroy synapses and neural connections in the brain.” Again, careful due diligence is necessary before proceeding.
How to Buy Vigil Neuroscience IPO (VIGL) Stock
With Vigil set to launch shortly, interested buyers must acquire shares at the open, necessitating knowing how to buy stocks. Below is a quick refresher.
Step 1: Pick a brokerage.
Nowadays, the best brokers compete on similar terms and access opportunities. Therefore, take the time to discern which platform ideally suits your needs.
Step 2: Decide how many shares you want.
IPOs are risky because of the unknown, and biotechs in particular are volatile. 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).
VIGL 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.
While the pre-IPO window for VIGL has closed, investors can seek out future ground-floor pricing opportunities via SoFi Invest.
Approach with Both Hope and Rationality
With neurodegenerative diseases imposing harm and frustration on both the patient and caretakers alike, Vigil Neuroscience’s research into microglia-based therapies is a welcome one. However, investors must be aware that this arena has been a cruel one, thus requiring strict money management for VIGL stock.