Motif Bio (LON:MTFB) is the latest biotech to have its Nasdaq IPO hopes crushed by an unreceptive market. The late-phase antibiotic player aimed to secure $26 million (€23 million) from new investors and $9 million from an existing backer, but this relatively modest ambition has proven to be beyond its reach.
London-based Motif Bio is describing its action as a deferment of the pricing of stock it plans to list on Nasdaq, rather than the cancellation of its IPO. The plan is to continue talking to investors with a view to forging ahead with the IPO at a later date, but the delay raises doubts about whether Motif Bio can get the listing done in the near term. Motif Bio plans to provide an additional update on the status of its ongoing talks with investors sometime down the line.
The IPO was intended to give Motif Bio the money it needs to wrap up pivotal trials of the antibiotic iclaprim in acute bacterial skin and skin structure infections, while also enabling it to gear up for a Phase III study in hospital-acquired bacterial pneumonia. With the IPO deferral depriving Motif Bio of the $35 million it wanted to carry out these activities, the biotech may now need to find another way to fund itself through to the completion of its pivotal trials.
Investors in London responded by driving Motif Bio’s share price down by up to 20%. The drop wiped out a large slice of the gains Motif Bio’s stock made in the weeks after the company committed to the Nasdaq IPO. When Motif Bio first outlined its plans and, in particular, when it set terms late last month, the prospect of a clear financial runway to Phase III data led investors to drive up the value of the firm. The financial runway is now significantly less clear.
Motif Bio has come unstuck on Wall Street despite seeking a relatively small sum of money. With Invesco Asset Management, which owns one-quarter of Motif Bio, agreeing to pick up $9 million of the Nasdaq IPO shares, Motif Bio was left needing to land $26 million from other investors. Despite having Phase III data on the horizon and an insider onboard, Motif Bio has joined the list of European biotechs to try and, at least temporarily, fail to part Nasdaq investors from their money in 2016.
Bavarian Nordic (CPH:BAVA), Poxel (EPA:POXEL) and Tigenix (EBR:TIG) have all delayed or cancelled Nasdaq IPOs this year, while 2015 ended with Basilea Pharmaceutica (SWX:BSLN), Silenseed and others backing out of planned listings. Some companies, notably Merus ($MRUS), have succeeded in listing on Nasdaq, but typically only after scaling back their fundraising ambitions.
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Motif Bio plans Nasdaq IPO to bankroll PhIII antibiotic trial