Biotechs Molecular Partners and Xenon Pharmaceuticals ($XENE) finally made their way to the public markets after previously postponing their IPOs, but each had to settle for a substantial discount in the process as investors continue to greet drug developers with skepticism.
Switzerland's Molecular Partners priced its offering at about 23.40 Swiss francs ($24.24) per share, grossing roughly $100 million in its debut on the local SIX exchange. That total is nearly $34 million less than the company sought back in September, reflecting volatility on the Swiss market and in global valuations of biotechs in general.
Xenon, which is developing genetic treatments for rare diseases, took an even bigger haircut, raising just $36 million and pricing at $9 a share, below its expected range of $10 to $12. The Canadian company had previously aimed for a $52 million debut.
Such stories are commonplace in the current boom-and-bust climate for biotech IPOs. More than 70 drug developers have gone public in 2014, but the frothy valuations of the early year have long since subsided, leaving many market entrants to either accept painful discounts to their planned prices or put off their offerings altogether.
And things don't necessarily get better post-IPO. Last month, Forward Pharma ($FWP) pulled off one of the year's biggest debuts with a $221 million raise only to see its shares drop sharply that very morning. Dermira ($DERM) suffered a similar fate a few weeks before, joining a list of postpricing laggards that includes Foamix Pharmaceuticals ($FOMX) and Auris Medical ($EARS).
But that hasn't stemmed the stream of filings. 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 has set terms for a $65 million fundraise, while Inotek has filed to raise more than $80 million, each joining a queue of roughly 40 drugmakers eyeing IPOs.
- read Xenon's release
- get more on Molecular Partners
Special Report: FierceBiotech's 2014 Fierce 15 - Molecular Partners