Roche ($RHHBY) spinout Basilea Pharmaceutica is scrapping its plot to go public in the U.S. with a $190 million IPO, planning to fund its Phase III antibiotic program through other means as Wall Street's view of biotech continues to dim.
The company, already traded on the Swiss exchange, had planned to make the jump to Nasdaq and raise cash to push ceftobiprole, its lead antibiotic, through late-stage trials in the U.S. Basilea nixed that effort Tuesday, citing market conditions, and now plans to sell bonds worth up to 175 million Swiss francs ($177 million) to support its top clinical candidate.
Basilea has revenue coming in thanks to Cresemba, an antifungal drug partnered with Astellas and approved in the U.S. and Europe, while the wholly owned ceftobiprole is on the market in 13 European countries and Canada but is yet to receive FDA approval. The Basel-headquartered company also has a pair of cancer treatments in clinical development and an early-stage inhaled therapy for bacterial infections related to cystic fibrosis.
Basilea's Nasdaq change of heart comes as the once-scalding market for biotech IPOs has roundly cooled.
After about three quarters of wall-to-wall above-range offerings, the past few months have seen would-be public drugmakers take discounts, upsize their offerings or call off IPOs altogether. Concerns about drug pricing, coupled with a few major clinical failures, set off a market correction in the fall that has dragged down biotech share prices across the board and dulled investors' support for IPOs in the sector.
- read Basilea's statement