TRex Bio IPO: LLY-backed biotech focused on autoimmune, inflammatory diseases debuts

Premarket trading in shares of TRex Bio, a developer of therapies for autoimmune and inflammatory diseases, is underway on Freedom’s client trading platform. Industry giants have invested in the company, including Eli Lilly, the world’s most valuable pharma company, as well as the venture capital arms of Pfizer and Johnson & Johnson. The stock is due to debut later Friday during the Nasdaq regular session under ticker symbol TRXB.

TRex Bio has raised around $116.7 million in its Nasdaq IPO. It priced 8.33 million shares at $14 apiece, the bottom of its previously announced range of $14-16 per share. The company had said its longtime partner and investor Eli Lilly was interested in buying shares in the IPO, after which its stake would not exceed 19.9%. TRex Bio’s announcement did not specify whether Eli Lilly ultimately purchased shares or, if so, how many. At the IPO price, TRex Bio has a market value of $384 million, Bloomberg estimates.

JPMorgan, Cantor, Evercore ISI, Stifel, and Wedbush PacGrow served as underwriters for the offering. The company granted them a 30-day option to purchase up to an additional 1.25 million shares.

TRex Bio plans to use some of the proceeds to advance its experimental drug TRB-061, which is for patients with atopic dermatitis, a chronic skin condition, and alopecia areata, a disorder that causes hair loss, according to the prospectus. Another portion of the proceeds will fund further work on TRB-071, which has yet to start human trials, while the remainder will go toward working capital and other general corporate purposes, the documents state.

TRex Bio was founded in 2018 with backing from a syndicate of investors that has included venture capital firm SV Health Investors, Eli Lilly, and the venture capital arms of Johnson & Johnson and Pfizer. It focuses on discovering and developing drugs to restore immune balance and promote tissue repair in patients with autoimmune and inflammatory diseases.

Since its founding, the start-up has focused on studying regulatory T cells, or Tregs, a specialized type of immune cell. Its work is based on the hypothesis that Tregs in human tissue are not merely passive suppressors of inflammation but “active orchestrators of tissue immune homeostasis and repair.” By studying how these cells behave, the company believes it can make drugs that emulate their functions and help the body to achieve more durable disease control. The science underlying this approach predates the company: in 2025, three scientists received the Nobel Prize in Physiology or Medicine for discoveries concerning peripheral immune tolerance.

TRex Bio initially operated within the Eli Lilly ecosystem, market intelligence site VCBeat notes. A turning point came in 2021, when the start-up was preparing to emerge from “stealth mode” and tap the capital markets. Johnston Erwin, a 36-year Eli Lilly veteran, left the drugmaker that year to become TRex Bio’s CEO, according to VCBeat. In 2022, the biotech completed an extension of its Series A round, followed by its Series B in 2024. The company has raised $220 million since its founding, the prospectus states.

TRex Bio currently has two wholly owned product candidates: TRB-061 and TRB-071. It is also developing another experimental drug, TRB-051, in partnership with Eli Lilly. Lilly began a phase I first-in-human study of the molecule in 2024 and plans to begin testing it in patients with lupus with cutaneous involvement by year-end.

The main risk is that the start-up’s entire pipeline remains at an early stage of clinical or preclinical development, VCBeat notes. Failure to secure regulatory approval for the drugs or weak trial results could weigh on the stock in the future, Freedom analyst Alem Bektemirov warns. Freedom has set a target price of $17 per share for TRex Bio, implying 21.4% upside to the IPO price.

Eli Lilly’s potential participation in the IPO is a positive for investors, says VCBeat. If Lilly purchases a sizeable allocation in the offering, it would be “a meaningful validation and support signal to investors,” IPO expert Donovan Jones writes on Seeking Alpha. He also highlights the company’s strong financial position: as of mid-2026, the company had $90.9 million in cash, cash equivalents, and marketable securities, versus total liabilities of $9.9 million.

VCBeat reckons the next 12-18 months will be critical for the biotech. A phase II trial of TRB-051 is set to begin in 2026, while new data on the other two candidates is expected in 2027. “Each milestone represents a significant test for TRexBio,” VCBeat concludes.