IPO optimism brings Molecular Partners and Xenon back to the table

Two biotechs are again mounting IPO efforts after market volatility scuttled their first attempts, as Molecular Partners and Xenon Pharmaceuticals pitch downsized offerings in hopes of finally making onto the public markets.

Switzerland's Molecular Partners, which called off plans for a $134 million offering last month, now plans to debut on the Swiss SIX exchange and gross $100 million. Xenon, a Canadian gene therapy biotech that nixed a $52 million offering last month, is back with plans to raise $44 million and list on the Nasdaq.

The resumed offerings come amid a boom-and-bust climate for biotech IPOs. More than 70 drug developers have gone public in 2014, but the frothy valuations of the early year have long since subsided, leaving many market entrants to either accept painful discounts to their planned prices or put off their offerings altogether.

And things have yet to settle down. Forward Pharma ($FWP) pulled off one of the year's biggest debuts last month with a $221 million raise but promptly traded down more than 15%, and recent entrant Dermira ($DERM) suffered a similar fate after pricing.

For Molecular Partners, restarting the IPO process is less an affirmation in the market's future than an acknowledgement of its unpredictability, CEO Christian Zahnd told Reuters.

"There is a certain level of uncertainty where the markets will be 6 or 9 months from now," Zahnd said. "And so we clearly said, if there's the possibility to go out we should do it, as the most important thing for us is to build the basis for the successful long-term development of the company."

If all goes according to plan, Molecular Partners will spend its proceeds on in-house R&D, new licenses and potential buyouts. To date, the 2014 Fierce 15 honoree has made its name as a go-to collaborator for drugmakers with an eye on protein therapeutics, striking deals with Roche ($RHHBY), Allergan ($AGN) and Johnson & Johnson ($JNJ). Now, with those ongoing collaborations generating revenue and keeping the lights on, Molecular Partners is ready to focus on its unpartnered assets, centered on the company's proprietary DARPin technology, which allows it to craft genetically engineered proteins that can mimic antibodies and bind to specific targets anywhere in the body.

As for Xenon, the company is looking to do internal development of its own, expanding upon from partnerships with Genentech, Merck ($MRK) and uniQure ($QURE) to focus on its proprietary pipeline.

Meanwhile, the steady stream of biotech IPO filings trickles on. CRO PRA Health Sciences is angling for $400 million in a Wall Street debut, while its rival INC Research is shooting for $150 million in an offering expected to price this week. NeuroDerm set terms for a $65 million fundraise, joining a queue of roughly 40 drugmakers eyeing IPOs.

- read the Reuters story
- get more on Xenon

Special Report: FierceBiotech's 2014 Fierce 15 - Molecular Partners