Uphill climb gets even steeper for biotech IPOs

Wall Street may have had its arms open wide for GM's new market debut, but drug developers are finding the same chilly disdain for red ink that has greeted almost every offering this year. Zogenix and Denmark's Zealand Pharma both served up new offerings only to find a limited appetite for what they had on offer.

Zogenix priced 14 million shares at $4 each, a fraction of the $12 to $14 range that the biotech had hoped to fetch for six million shares. Zogenix could boast of sales of a drug delivery technology, but it's been wading in red ink from the cost of developing a chronic pain therapy.

Zealand, meanwhile, managed to raise only $58 million from its IPO, after slashing plans to sell nine million shares by half. Shares priced at 86 kroner, the bottom of its range, and then promptly slipped five percent once trading began. Zealand is partnered with Sanofi-Aventis on a diabetes drug. And in yet another sign of the choppy IPO waters investors are still waiting to see what fate awaits Anacor Pharmaceuticals, which failed to price last week.

A surge of IPOs in recent weeks was capped by the gangbuster arrival of GM, which wowed investors with an exciting IPO that whipped up something of a party atmosphere. Drug developers, though, are finding that this was one party that they may not want to try and crash.

- read the Dow Jones report on Zogenix
- see the Bloomberg report on Zealand Pharma
- and here's the Wall Street Journal report on GM and the IPO wave