Biotech IPO

Pfizer looks for perfect fit for their VC funds

John Carroll — Mon, 27 Oct 2008 11:04:22 -0400

Pfizer execs turned up at AusBiotech 2008 to talk up the role that pharma plays these days in providing venture capital to emerging drug developers. The drug giant says that they're looking for a strategic fit for their pipeline work, but also expect to get a return on the money they invest. And that can be problematic when you consider that the IPO drought for biotech companies is now 11 months old.

"A large number of pharmaceutical companies now are using venture capital as a tool to create relationships with the entrepreneur world," said Pfizer vice-president for venture capital Barbara Dalton.

- read the story in The Age

ALSO: Xanodyne Pharmaceuticals isn't going to try and break the IPO logjam. The developer dropped its plans for an $86 million offering. Story

Phenomix dumps IPO, inks Forest Labs deal

Calisha Myers — Thu, 23 Oct 2008 10:56:20 -0400

San Diego-based biopharma Phenomix has cancelled its $86.25 million initial public offering. The Novartis-backed firm filed for an IPO back in January, but cited "market conditions" as its reason for withdrawing the IPO.

The company, which was founded in 2001, is currently developing treatments for type 2 diabetes and hepatitis C. It's lead candidate is an oral DPP-4 inhibitor for type 2 diabetes, dutogliptin (PHX1149), which is currently in phase III clinical trials. In addition to NovartisBioVenture fund, leading its long list of investors are JP Morgan, Nomura Phase4 Ventures, Delphi Ventures, Alta Partners, Sofinnova, Baker Brothers, CMEA Ventures and GBS Venture Partners.

There was some good news from the company today, however. Phenomix and Forest Laboratories have inked a $340 million deal to develop and commercialize Phenomix's type 2 diabetes candidate, dutogliptin (PHX1149). Under the terms of the agreement, Forest will make an upfront $75 million payment to Phenomix. The two companies will equally share the profits and expenses of the development, commercialization and marketing in the U.S. Phenomix could receive up to $340 million in upfront and milestone payments for development in U.S. markets. Phenomix was a 2007 Fierce 15 company.

- see the release on the deal
- check out the IPO story in Mass High Tech

In rocky market, Fluidigm withdraws IPO

Maureen Martino — Fri, 26 Sep 2008 11:31:26 -0400

Fluidigm was prepared to boldly go where few have gone this year: the public markets. The South San Francisco based company, which develops, manufactures and markets microfluidics products, previously announced plans for an IPO designed to raise as much as $85 million ($14 to $16 a share). Fluidigm hoped its big-name backers and promising technology would help it succeed where so many others have failed. Unfortunately that wasn't enough. Citing "historic instability in the market," Fluidigm announced today that it has withdrawn its registration statement for its IPO.

"We went out on September 5th with a very strong story and Fluidigm received a warm reception from the investment community. We explained how our technology contributed to life science research and how the company was poised to grow," said Gajus Worthington, Fluidigm President and CEO. "While these messages were well-received, pushing ahead with a deal in the current market was not in our best interest."

- check out Fluidigm's release

Economic crisis rips biotech's bargaining position

John Carroll — Fri, 19 Sep 2008 09:50:52 -0400

Up to now it's been a sellers market for European biotechs when it comes to making deals with pharma organizations out to the beef up their pipelines. Now the Financial Times says that the credit crisis and other market woes (IPOs have evaporated and venture capitalists are looking for 25 to 30 percent returns) have begun to cut off other sources of cash for biotech companies, leaving them more willing to accept lower offers from cash-rich pharma outfits. The same trend will drive more consolidation of the industry, such as we saw in yesterday's marriage of BTG and Protherics.

"In the past few years, it was a sellers' market driving up valuations for less and less mature technology," says Tibur Papp, head of advisory at PharmaVentures, a UK-based consultancy. "Now the environment is changing and with a significant impact on biotech finance, it has become more difficult to find partners and good deals."

- check out the article from the Financial Times

Fluidigm attempts an IPO

Calisha Myers — Wed, 17 Sep 2008 11:39:33 -0400

Nanotech company Fluidigm is now going public. The South San Francisco based company plans to begin offering 5,300,000 shares at $14 to $16 on Thursday, according to the company's SEC filings. If all goes according to plan, the IPO could raise as much as $85 million.

Fluidigm develops, manufactures and markets microfluidics products designed to make laboratory testing more efficient and precise. If the IPO goes as expected, the company plans to use the proceeds to expand their facilities and manufacturing operations. According to a report in the San Francisco Business Journal, Fluidigm's lease at its manufacturing facility in Singapore is up in October 2011 and the company will need to expand or move elsewhere in the city. The company's SEC filing also indicated that in addition to funding development and an expansion of their sales force, they may also use the revenue to acquire other businesses, products or technologies.

Fluidigm may have a tough time making a sell, for a number of reasons. Although 86 venture-backed companies went public last year, only 6 have done so this year, according to the National Venture Capital Association. Fluidigm will be only the second venture-backed deal to go before investors this quarter. Smaller biotech companies and start-ups have especially been hit with losses over the past few years, and Fluidigm is no different. The company reported a net loss of $25.5 million last year with only $7.3 million in revenue, and $23.6 million net loss on 6.4 million in revenue in 2006, according to Fluidigm's SEC filings. It's likely the company will see similar losses, if not worse, this year.

Given all of this, and the state of the economy in general, the odds seem stacked against them. But the company is backed by a number of blue chip investors, including Lehman Brothers Healthcare Fund, Euclid SR Partners, Versant Ventures and Alloy Ventures. The offering will be made through Morgan Stanley, UBS Investment Bank, Leerink Swann and Pacific Growth Equities. Fluidigm was a 2003 Fierce 13 company.

- read the New York Times article

Venture groups switching to survival mode

John Carroll — Tue, 29 Jul 2008 10:15:05 -0400

The Washington Post examines a trend that may have a deep impact on biotechnology. With IPOs all but dead for now, venture capital groups have been forced to pump more and more money into their companies in order to keep them afloat. And that has been leaving less and less money to fund new companies that need their backing to get started. A decade ago it took an average of four years for a venture-backed firm to go public. Now it's 8.6 years.

"It's really a question of staying the course and surviving," said Roger Novak, general partner of Novak Biddle Venture Partners in Bethesda. "This is the worst we've seen."

- read the story from the Washington Post

Jazz Pharma axes staffers after delaying two trials

John Carroll — Thu, 12 Jun 2008 10:56:28 -0400

Jazz Pharmaceuticals says it needs to extend the development time line for two key drug programs, a move that triggered a decision to lay off 33 workers, or eight percent of its workforce. In a statement, Jazz also said it is actively hunting out partners for its development programs. The biotech has delayed a planned Phase III of JZP-7 for restless leg syndrome and a planned Phase II trial of JZP-4, in development for epilepsy and bipolar disorder. The layoffs are targeted at the company's R&D and administrative areas.

CEO Samuel Saks said that Jazz is "actively seeking partners for several of our development programs. We have been pleased with the level of interest from potential partners and look forward to completing one or more development partnerships to help us bring these important therapies to the market as quickly as possible."

- check out Jazz's release
- read the AFX story

Peplin joins list of developers to drop IPO

John Carroll — Tue, 10 Jun 2008 11:57:33 -0400

You can count Peplin on the growing roster of developers that couldn't make a go of an IPO. The Emeryville, CA-based company cited "unfavorable market conditions" as its reason for dropping the IPO, which was filed with the SEC last year. A string of biotechs have made a similar move as investors have proved difficult to win over at a time public markets are badly roiled. Peplin had planned to use the IPO money to fund development of dermatology therapies. The company has a special focus on treating skin cancers. Shares of Peplin trade on the Australian exchange.

- read the AP story

Early IPO at Aldagen leaves analysts wondering

Mon, 19 May 2008 06:59:54 -0400

A pair of analysts has taken a cautious attitude toward Aldagen's plans for an $80 million IPO. The stem-cell company has no products on the market, makes no profit and is attempting to pioneer an FDA approval in an emerging field. None of that exactly breeds confidence, especially given the arctic chill that has afflicted biotech IPOs recently.

"These are the worst capital markets for biotech in the last five years," says Steve Brozak, an analyst at WBB Securities. "Their technology is good, but it's a tough equity market."

- read the report from the New York Times

Codexis blueprints $100 million IPO

Mon, 14 Apr 2008 06:59:54 -0400

Codexis has decided to wade into frigid market waters with an IPO that may be used to raise upwards of $100 million. The company makes biocatalysts: enzymes or microbes that cause chemical reactions. Those biocatalysts have been used by drug companies like Bristol-Myers Squibb, Merck and Pfizer. Proceeds will go to general working capital. And the money is needed, it appears. Codexis lost $39 million last year even as its earnings jumped to $25.3 million.

- read the AP story

Related Articles:
Codexis garners $37M in fourth round. Codexis report
M&A activity heats up as biotech IPOs struggle. IPO report
Big Biotech emerges as a shelter in economic storm. Report

Quark Pharma snares $27M for RNAi work

Mon, 07 Apr 2008 06:59:55 -0400

Quark Pharmaceuticals has garnered $27 million in a new round of venture financing. The RNAi developer attracted the support of SBI Asset Management and SBI Investment, subsidiaries of the prestigious SBI Holding Inc.

"The additional funding we are announcing today will allow us to significantly expand our clinical program," says Quark CEO Daniel Zurr. "Between our licensee, Pfizer, and Quark, we anticipate having Quark drug candidates in five clinical programs by the second half of 2008."

- read the release

Related Articles:
NovaCardia, Quark Biotech file for $86M IPOs. Report
A billion-dollar lesson in RNAi economics. Report

Biotech going public with reverse mergers

Mon, 17 Mar 2008 07:59:55 -0400

With the IPO market waters looking distinctly chilly these days, if not outright frigid, BioWorld says that a growing number of biotech companies are turning to the reverse merger ploy to take themselves public. Athersys and Nile Therapeutics took that route last year. And Philip Young, the CEO of Osteologix, touts the reverse merger as faster and less expensive than the IPO course. But there are rules, cautions Rodman and Renshaw's John Chambers. A successful reverse merger should come at a time of forward progress, when the company can boast about significant new clinical data or a pipeline advance. And there's no guarantee you'll be suddenly showered with new funds.

"Unlike an IPO, a reverse merger does not necessarily automatically provide operating funds to the company, so having a solid funding strategy either concurrent or following the merger is essential," says Raptor Pharma CFO Kim R. Tsuchimoto.

- read the article in BioWorld

Related Articles:
Dealmaking stays big even as the markets tremble. Report
M&A activity heats up as biotech IPOs struggle. Report
Biotech IPOs losing their attraction. Report

Credit squeeze begins to have an impact on VC

Thu, 07 Feb 2008 06:59:57 -0500

The Star-Ledger offers a new perspective on the investment scene in biotechnology. Analysts tell the newspaper that the credit crunch has put a squeeze on private equity groups who can no longer use cheap debt to buy into developers and then flip them. As a result, VCs are accepting smaller returns on smaller deals. With Big Pharma on the hunt for acquisitions, venture groups are less likely to relinquish shares before a big buyout. And buyouts have replaced IPOs as a key funding stage for biotechs.

- read the report from the Star-Ledger

Related Articles:
Will private equity get a crush on biotechnology? Report
Biotech, emerging markets are big VC targets. Report
VC adds billions in its pursuit of biotech ventures. Report
Biotech sees big money from corporate players. Report
Top 20 VC deals of 2007. Report

Turbulent market forces Biolex to scrap IPO

Mon, 04 Feb 2008 06:59:54 -0500

The turbulent stock market has claimed another biotech victim. Biolex Therapeutics says it is dropping its bid to go public, the result of some lethal market rip tides that have already spurred more than a dozen companies to surrender their IPOs. Biolex and OctoPlus have been pushing the development of Locteron, an experimental therapy for hepatitis C.

- here's the report from the Charlotte Observer

Related Articles:
Biolex pockets $30M for drug discovery work. Report
Biolex garners $36M in second round. Report
Dealmaking stays big even as the markets tremble. Report

Phenomix outlines its shot at an IPO

Mon, 28 Jan 2008 06:59:57 -0500

Phenomix says now is the time to go public. The San Diego-based drug developer has filed papers with the SEC that outline an initial public offering designed to raise $86 million. Phenomix has development programs for type 2 diabetes as well as hepatitis C. Its lead program is a mid-stage DPP4 inhibitor. Its long list of venture backers include JP Morgan FUnds, Nomura Phase4 Ventures, Delphi Funds, Alta Partners Funds, Sofinnova Funds, Novartis Funds. Morgan Stanley, Credit Suisse, Oppenheimer & Co. and Pacific Growth Equities will underwrite. Phenomix was a 2007 Fierce 15 company.

- see this release
- here's the report from SoCalTech

Omeros lays plans for $115M stock offering

Thu, 10 Jan 2008 06:59:56 -0500

Seattle-based Omeros has blueprinted plans for an IPO to raise $115 million. Omeros is betting that its experimental therapies for inflammation and CNS disorders can snag investors' dollars to complete a late-stage study of its lead drug. Omeros has burned through $72 million since it started in 1994 and had $27 million on hand as of last September. The Seattle Times notes that the filing comes after a rough year for IPOs, with more filings withdrawn last year than completed.

- see this release
- read the report from the Seattle Times

Related Articles:
Omeros to buy Nura in cash/stock deal. Report
Omeros gets new funding. Report

Bayhill files IPO papers, hunts for cash

Wed, 09 Jan 2008 06:59:58 -0500

At least one biotech is out to brave the chilly waters of Wall Street. Looking to gin some capital to cover the cost of upcoming clinical trials, Bayhill Therapeutics filed an IPO at least tentatively designed to raise about $86 million. Its experimental therapies are in studies to determine their effectiveness in restoring "tolerance" in immune systems, a new category of drugs with no currently approved therapies on the market. Bayhill has lost $13.5 million in the nine months through September 30, not unexpected in a company with no products on the market. Palo Alto, CA-based Bayhill's lead therapy is for multiple sclerosis with another program for type 1 diabetes.

- read the AP report

ALSO: Italy's Philogen says that regulators have OK'd its IPO. Report

Related Articles:
Bayhill raises $15.8M in VC. Report
M&A activity heats up as biotech IPOs struggle. Report
Biotech IPOs losing their attraction. Report
Deal-making hits a faster pace in '07. Report

Dealmaking stays big even as the markets tremble

Wed, 02 Jan 2008 06:59:56 -0500

The credit crunch could play a miserly role in hobbling biotech, but I have yet to see it. As long as big pharma sees its future in biologics, you can expect to see investors laying their bets to benefit from that trend. The JP Morgan meeting in January is a reliable harbinger of the level of excitement surrounding deal-making in biotechnology. That event is still a few days away, but the strong buzz around the meeting is a positive sign that 2008 will go down as a good year in the industry.

There is no indication, though, that the stock market will play a major supporting role in the near term. Unfortunately, a chilly Wall Street for IPOs--and no one can reliably predict when that will come to an end--can only make merger options even more attractive. Some great biotech companies in the making will be bought out and blended into pharma, and they're likely to lose some of the aggressive thinking and planning that has dramatically defined the differences between large and small in this business.

The venture groups, meanwhile, are all sounding suitably bullish. If investors keep jumping into new funds, there will be more money available for players--particularly in the U.S.

Related Articles:
Billion-dollar baby: Biotech still on a roll with VC funds. Report
Deal-making hits a faster pace in '07. Report
Burrill bullish on M&As. Report
Should Pharma take the M&A cure? Report
M&A activity heats up as biotech IPOs struggle. Report

Tough times at Chemokine

Wed, 05 Dec 2007 06:59:57 -0500

More bad news for Canadian biotechs: Chemokine Therapeutics has decided to withdraw its public offering due to poor conditions in the financing market. The company is reducing its costs by laying off 65 percent of its workforce; those workers who are staying have agreed to a 10 percent salary reduction. In addition, Chemokine's CEO C. Richard Piazza has resigned and CFO Bashir Jaffer will serve as interim CEO. According to the release, Chemokine is "currently evaluating financing alternatives to fund ongoing activities." The company is developing chemokine-based therapies to treat cancer, blood disorders, and vascular diseases.

- see Chemokine's release for details

Related Articles:
Canadian biotech stocks suffer as bad news mounts. Report
M&A activity heats up as biotech IPOs struggle. Report
Top 5 layoffs of 2007. Report

Targanta shares start trading at a discounted price

Wed, 10 Oct 2007 06:59:55 -0400

Shares of Targanta began trading today at $10 a share, a significant discount under the $12 to $14 range it set for itself last month. That discount will cut the company's take from the IPO from a projected $92 million to $57.5 million. Targanta's trouble going public underscores the generally lackluster results biotech companies have been seeing this year on the public markets. Targanta plans to submit its antibiotic oritavancin for FDA approval in early '08. The biotech reported a loss of about $30 million last year. Targanta came in second on our list of the top five VC deals of the first half of 2007.

- see the release on the IPO
- here's the report from Mass High Tech

Related Articles:
Targanta raises $70M in third venture round. Report
Targanta files for $86M IPO to push antibiotics. Report
M&A activity heats up as biotech IPOs struggle. Report

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