For evidence of Wall Street's ongoing hesitance to embrace biotech startups, look no further than ProQR Therapeutics ($PRQR) and Foamix Pharmaceuticals ($FOMX), two IPO debutantes with diametric fortunes on the market.
ProQR, a Dutch outfit with plans to challenge Vertex Pharmaceuticals ($VRTX) in cystic fibrosis, pulled off a $98 million raise, pricing at the high end of its expected range and dialing up its offering. Israel's Foamix, on the other hand, managed just $40 million to support its pipeline of skin treatments, pricing at roughly half of its previously expected value and upsizing its deal to close the gap. Both initially filed to raise $75 million.
With its money, ProQR will bankroll a first clinical trial for its lead candidate, an RNA-based therapy for CF. The drug is designed to correct an underlying cause of the disease by repairing defects in the CFTR gene, delivered through a handheld inhaler to improve lung function.
Foamix has earmarked its new cash to pay for Phase III trials on FMX101 for acne and FMX102 for impetigo, two foam formulations of the antibiotic minocycline. The company had planned to spend another $5 million-plus on mid-stage studies on treatments for rashes and rosacea, but its deep IPO discount may make that impossible.
The companies' divergent fates illustrate the new normal in biotech's protracted IPO boom. Since the early days of 2014, when scores of drug developers pocketed billions and swung as many as 10 debuts a week, things have tightened up, with investors increasingly wary of risky biotech startups. Many IPO hopefuls have had to put off or cancel their offerings altogether, while others, like Foamix, have been forced to accept deep discounts to get the listings they desire.
But it's not all bad news for biotech on Wall Street. Companies with differentiated assets and clear paths to market are still pulling off sizable offerings, including this week's $97 million debut from Tokai Pharmaceuticals ($TKAI) and recent successes from Sage Therapeutics ($SAGE), Zafgen ($ZFGN) and Kite Pharma ($KITE).
- here's ProQR's release
- read Foamix's note