IPO headwinds? What IPO headwinds? In a market that has blown away many biotechs seeking to go public, the pharma services industry continues to buck a negative trend as Patheon sets its terms for an eye-watering $625 million initial public offering.
The Amsterdam-based contract drug developer said in its SEC-1 filing that it plans to raise the $625 million by offering 30.5 million shares (with 16% going to insiders) at a price range of $19 to $22.
Renaissance Capital notes that at the midpoint of its proposed range, Patheon would command a market value of a whopping $2.9 billion.
The company, run by former Biogen ($BIIB) CEO James Mullen, booked $1.8 billion in sales for the 2015-2016 financial year ending in April.
Mullen has pushed on with the company since taking over in 2011, with its $255 million deal for softgel specialist Banner Pharmacaps in 2012 being the M&A highlight of his tenure.
In August 2014, Patheon also acquired Gallus BioPharmaceuticals for an undisclosed sum and picked up its first U.S. biologicals facility in the process.
More recently, in March of this year, the company penned a deal with Amgen ($AMGN), which is set to see the CDMO provide "flexible manufacturing solutions" for the biopharma.
In fact, Patheon has been on a major growth kick since merging with CMO giant DSM in 2014--a $2.6 billion move that united the parties under the name DPx and gave private equity outfit JLL Partners a 51% stake, while leaving the rest to Royal DSM.
From fiscal 2011 to fiscal 2014, Patheon's revenue jumped by nearly 250%, and the contractor now employs nearly 9,000 people across 11 countries.
The outsourcing company had been said to be seeking a $100 million IPO last year, but has blown this out of the water with its new $625 million target.
The Dutch company, moving forward after years of mergers and acquisitions, in October united its disparate units under a sole banner.
It aims to price next week on the NYSE under the ticker "PTHN." In a statement, Patheon said it will use the cash to repay all of its outstanding $550 million of Senior PIK toggle notes, pay-related fees, expenses and accrued interest. “Patheon will not receive any proceeds from the sale of ordinary shares by the selling stockholder,” it said.