Seaking Alpha – Eliem Therapeutics’ stock pops 55%+ intraday despite seemingly poor IPO pricing

Eliem Therapeutics (NASDAQ:ELYM) popped more than 50% intraday Tuesday in the biopharma firm’s first trading session following an IPO that had seemed to price badly.
ELYM opened at $16.25 a share at midday and shot up to as high as $19.44 shortly afterward, ahead 55.5% from the stock’s $12.50-a-share initial public offering price.
Shares later pulled back some, but were still changing hands at $18.51 shortly before 1:30 p.m. ET, up 48.1% on the day.
The strong opening represented a sharp turnaround for the pharma firm’s IPO, which priced far below the $17-$19/share range that Eliem (ELYM) had initially expected.
The company scaled back and tweaked its offering early Monday, cutting the IPO’s expected price to $12.50 while increasing the number of shares it offered the public to 6M from the 4.5M originally envisioned. ELYM also boosted underwriters’ overallotment options to 900,000 shares from the 675,000 previously planned.
Hours later, the IPO formally priced at $12.50 a share, with ELYM selling 6.4M shares instead of the 6M it had earlier forecast. The biotech also granted underwriters the right to buy 960,000 overallotment shares instead of the revised 900,000 expected.
All told, the IPO will value Eliem (ELYM) at $312M to $323M on a non-diluted basis, depending on how much overallotment stock underwriters ultimately purchase.
Elim is developing drugs for pain, depression and seizures. Its two lead candidates are in or will soon enter Phase 2a clinical trials.