Even with Eli Lilly's endorsement, TRex Bio (TRXB.US) struggles to enjoy a premium, as the issue price drops to the lower limit of $14.

According to Zhihu Finance APP, early-stage biotechnology company TRex Bio Inc., which focuses on autoimmune and inflammatory diseases, has raised $116.7 million through an IPO, with the offering price set at the lower end of its proposed range.

According to a statement released Thursday, the company sold approximately 8.3 million shares at a price of $14 per share. Previously filed documents indicated that the biotech company had set an offering range of $14 to $16 per share.

Based on the IPO offering price, San Francisco-based TRex has a market value of $384 million, calculated according to the number of outstanding shares listed in the documents.

The company's investors include Eli Lilly, SV Health Investors, Pfizer Ventures, Johnson & Johnson Innovation, Janus Henderson Investors, Alexandria Venture Investments, Delos Capital, and Polaris Partners. Prior filings indicated that Eli Lilly expressed interest in subscribing for shares in this IPO but does not intend to increase its stake to more than 19.9%.

Strong overall volume, diverging returns

TRex is expected to continue the strong momentum for U.S. healthcare IPOs this year. Compiled data shows that biotech and pharmaceutical IPOs have raised nearly $800 million so far this year, almost six times the amount raised during the same period last year.

However, its pricing reflects the direct manifestation of the "overall boom, internal divergence" pattern seen in biopharma IPOs in 2026: the sector's weighted average return this year is about +55%, but almost all the gains come from "platform-based, multi-pipeline, catalyst-nearing" companies.

Looking at subsequent performance, platform-based, multi-pipeline companies (Parabilis, BillionToOne) rose 66% on their debut; single-asset, single-indication companies (Electra) broke issue price on their first day. Investors now price according to "the specific risks of the story" instead of giving a unified premium to the entire sector.

Furthermore, companies that are closer to binary readouts (about to enter Phase 3, or having already filed for listing) are more sought after; companies whose key data won't be available for more than 18 months typically go without a premium or even break below issue price. Companies like TRex Bio, which are "single-asset, Phase 1, with key data expected only by mid-2027," are a segment that the market has started to specifically price down in the second half of the year. Demand for such offerings is real but relatively shallow, and Eli Lilly's strategic endorsement is only enough to bring the deal to market, not to support a price premium within the proposed range.

The company plans to use the funds raised this time to advance its core candidate drug TRB-061, which is currently in early clinical trials for patients with moderate-to-severe atopic dermatitis. Documents show the company expects to release topline data for this investigational therapy by mid-next year. In addition, the company also plans to launch a Phase 1 clinical trial for TRB-071 in the first half of 2027, targeting inflammatory bowel disease.

In January of this year, TRex raised $50 million through a follow-on tranche of Series B preferred shares, with new investors including Janus Henderson and Balyasny Asset Management.

TRex CEO Johnston Erwin worked at Eli Lilly for 36 years before joining the company and previously led Lilly's internal venture arm, Lilly New Ventures.

Previously filed documents show the company had a net loss of $34.8 million in 2025, compared to a net loss of $3.1 million the previous year.

The offering is being led by JPMorgan, Evercore, Cantor Fitzgerald, Stifel Financial, and Wedbush PacGrow. Shares are expected to begin trading Friday on the Nasdaq Global Select Market under the ticker (TRXB.US).