Does Alder's IPO setback signal that the biotech IPO boom is ending?

Alder Biopharmaceuticals stumbled into Nasdaq today, accepting a discounted $10 price for its shares as signs mount that the bloom has come off biotech's rosy IPO boom of the past year.

The Bothell, WA-based biotech raised $80 million from the sale of 10 million shares, which will still fund a considerable amount of research at Alder. But the total was $35 million off the mark--and well below the range--Alder set for itself when it decided to go public. Investors evidently weren't overexcited about the company's pipeline prospects, which include the migraine therapy ALD403 and a Phase IIb anti-IL-6 drug clazakizumab partnered with Bristol-Myers Squibb ($BMY).

In recent weeks we've seen Cerulean ($CERU), Corium, Scynexis and Aldeyra all slash their prices to make a go of their IPOs, a common sight in 2012 but not your average experience during the blistering run of new offerings from the second quarter of 2013 to the end of the first quarter of this year.

The IPO boom has pumped billions of dollars into the industry, inspiring some U.K. biotechs to follow the same path and providing some long-sought relief for venture investors who were forced to ride out a lengthy IPO drought in the years following the 2008 financial crisis. But neither booms nor busts last forever. And eventually you run out of hot new companies to pitch, or at least see the supply run low.

Analysts have been wondering for some time when investors' appetites for new biotech IPOs will be sated, particularly after the recent correction to biotech stock prices. There's likely to be considerable speculation that these latest setbacks will send a sour signal to the market. As a result you can expect some increased jitters as high-profile developers like Zafgen go ahead with their own initial offerings.

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