Cumberland raises $85M, ending IPO drought
Nashville-based Cumberland Pharmaceuticals has broken a nearly two-year long drought of biopharma IPOs, raising $85 million in a public offering. Cumberland had expected to sell its shares for $19 to $21 each, but settled for $17.
The biopharma company has two products on the market, winning FDA approval for the pain and fever therapy Caldolor in June. Cumberland's strategy is to buy late-stage or approved therapies for acute care and gastroenterology. And the company says that it will use a chunk of its IPO money for new acquisitions. Reuters notes that this is the first biopharma IPO since ARYx Therapeutics went public in November of 2007.
Investors have turned a cold shoulder to IPOs of just about every stripe over the past year. The economic turmoil in the market last fall combined with the Great Recession had paralyzed one of the primary exit strategies for venture investors. But recently some biotechs have been raising the prospect for upcoming IPOs, a development that could encourage some VC groups to invest more in the drug development industry.
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