Shares of newly public Dicerna Pharmaceuticals Inc. barreled up 206.6 percent in their first day of trading Thursday, giving the Watertown biotechnology startup the largest opening-day gain of any company since the Chinese search engine Baidu.com went public in 2005.
Dicerna, which is working in the hot field of RNA interference, became the second Massachusettts company—and the first biotech—to complete an initial public offering this year. Nine state biotechnology companies made it through the IPO threshold last year.
“This is the best time to go public since 2000 for biotechs,” said Christoph Westphal, executive chairman of Verastem Inc., a Cambridge company developing cancer drugs that started the latest IPO wave when it went public two years ago. “A lot of the innovation is now happening in biotechs rather than pharmaceutical companies. If you have really fundamentally important science that could change therapeutic approaches, you can attract investors.”
Dicerna priced its initial public offering at $15 a share late Wednesday night, a 25 percent premium over the $11 to $13 range it had specified last week. It sold 6 million shares, raising $90 million and nearly doubling its cash on hand to finance develoment of drugs to treat cancers and liver diseases based on its gene-silencing technology known as RNAi.
In addition, Dicerna said it granted its stock underwriters a 30-day option to buy another 900,000 shares of stock at the public offering price by Feb. 4, potentially further boosting its cash reserves. Boston investment bank Leerink Partners LLC was a manager of the company’s IPO along with Jeffries LLC, Stifel, Nicolaus & Co., and Robert W. Baird & Co.
Dicerna opened on the Nasdaq exchange at $30 a share Thursday under the ticker symbol DRNA. Its stock closed at $46 a share, a gain of $31 from its original price.
Company executives declined to talk about Dicerna until the IPO closes next month, a spokesman said. Its stock-offering had been closely watched in Massachusetts and beyond both as a test of investors’ continued appetite for biotechs in 2014 and of interest in the field of RNA therapeutics. Several companies working in the field have disclosed investments, partnerships, and positive clinical results in recent weeks, including Cambridge-based Genzyme, Alnylam Pharmaceuticals Inc., Moderna Pharmaceuticals Inc., and Sarepta Therapeutics Inc.
Westphal, who is also a partner at the Boston venture capital firm Longwood Fund, has tajen five biotechs public, including Alnylam and Verastem.
“There has been very strong interest in biotechnology by investors in general,” said Kathleen S. Smith, principal at IPO investment advisory firm Renaissance Capital LLC in Greenwich, Conn. “We haven’t seen this kind of interest in biotech for a long time.”