A pair of erstwhile biotech IPO hopefuls made their way to the market at a significant discount, suffering the effects of a bear turn across the industry.
Edge Therapeutics ($EDGE), once angling for a $115 million debut, trimmed its expectations on the way to Wall Street but still took a sizable haircut. The company raised $80 million after pricing 7.3 million shares at $11 each, well below the $14 to $16 it forecast last month. And things were worse for Mirna Therapeutics ($MIRN), which set out to raise $81 million in August. The Texas biotech came through with only $44 million after pricing its shares at $7 apiece, just half of its previously expected midpoint.
For Edge, the funds, however reduced, will help pay the way for EG-1962, a microparticle treatment designed to ease symptoms for patients suffering from brain hemorrhages tied to aneurysms. And Mirna, at work on micro-RNA treatments for cancer, is investing in early-stage candidates designed to galvanize an immune system attack on tumors.
Each company is to some extent the victim of a brutal run of form for biotech on Wall Street, spurred by widespread controversy over drug prices and the lingering fear that the industry is in a bubble nigh on bursting. The Nasdaq biotech index ($IBB) was up about 30% for the year at its peak in July but has, in the past few days, given back all of its 2015 gains.
The sector's slump is a result of uncertainty among generalist investors and prudence among hedge fund managers, who are working to lower their exposure to biotech as its valuations wane. Whether the trend is leading up to a definitive end to the industry's now years-long bull run remains the subject of debate, but Edge and Mirna serve as examples of how broader market skittishness can drastically change the fates of individual companies.
- here's Edge's release
- read Mirna's statement