Aveo proves investors still lack appetite for biotech IPOs

Anthera, Ironwood and Aveo. What do these developers have in common? With their debuts, they've all proven that despite hope for a resurgence of biotech IPOs after a ghastly 2009, investors still aren't eager to invest in risky companies.

After delaying its debut two days, Aveo unloaded its initial public shares for $9, far less than the $13 to $15 range it had hoped for. That means the developer raised $81 million and has a market value of $267 million. The cancer drug company is currently in Phase III trials for tivozanib for renal cell carcinoma. It also has a Phase II program for lung cancer drug AV-299 and a host of Phase I programs. Additionally, the company has partnerships in place with Merck, OSI and others. But it has no marketed products, and, like most biotechs, has burned through oodles of cash in its existence.

Anthera went public earlier this month, pricing its shares at half of what it had originally hoped for. And when Ironwood went public in February, it ended up selling 16.7 million shares at $11.25 each--well below its $14 to $16 target. Biotech may not be in the valley of death experienced in 2009, but investors are still hesitant to part with their cash.

- read the Xconomy write-up

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