NuPathe's price cut shows slow biotech IPO recovery

Conshohocken, PA-based NuPathe has cuts its IPO price to just $10 a share, the company announced today. NuPathe was hoping to raise between $14 and $16 per share for a total of $75 million. The developer still plans to offer 5 million shares.

NuPathe's has a migraine treatment called Zelrix which has completed Phase III testing. The trial showed that migraine symptoms like pain, nausea and sensitivity to light and sound, significantly improved two hours after applying the Zelrix patch. If approved, the treatment could be on the market as early as 2012. The developer also has two preclinical drugs for Parkinson's disease and schizophrenia. The new IPO price is expected to raise $36 million, which Nupathe says it will use to complete trials of Zelrix.

NuPathe is just one of a number of developers that's had to reassess its IPO price. The public markets were completely closed to biotech companies until late 2009, and while a number of developers have laid plans to go public, investors have still been gun-shy when it comes to backing companies with a lot of development risk and no marketed products. Xconomy notes that there's been an uptick in IPOs in 2010 over the last two year, but that many companies--like Nupathe--have had to cut their share price to get their IPO off the ground. Ironwood Pharmaceuticals is the only venture-backed biotech company whose share price has increased since going public.

- see the PEHub report on NuPathe
- read the Xconomy article for more on IPOs