Biotech IPOs slump as Inotek comes in low and Carbylan strikes out

The frothy market for biotech debuts is looking a bit less promising this week as one entrant priced well below its hoped-for range and another called off its IPO altogether.

Inotek, at work on eye drops for glaucoma, raised just $40 million in its debut, moving 6.7 million shares at $6 each. The biotech had previously expected to bring in $65 million by selling 4.6 million shares at $13 to $15 but drastically lowered its ambitions the day before pricing. With the proceeds, Inotek will take its lead candidate, trabodenoson, into Phase III trials. The treatment works in tandem with glaucoma therapy latanoprost to increase fluid outflow in the eye's trabecular meshwork.

Separately, Palo Alto, CA's Carbylan Therapeutics postponed its plans after setting terms for an IPO worth $75 million at its midpoint. The biotech, at work on a treatment for osteoarthritis pain, planned to move 5.8 million shares at between $12 and $14 each. With its debut postponed, the company will likely need to find another way to get its lead candidate, the injectable Hydros-TA, through late-stage trials.

The tandem disappointments come amid a stretch run of success for biotechs on Wall Street.

Last year's record-setting pace of life sciences IPOs carried on into the new year, as January alone saw Spark Therapeutics ($ONCE) raise $161 million, Ascendis Pharma ($ASND) raise $108 million, Flex Pharma ($FLKS) bank $86 million and Zosano Pharma ($ZSAN) pull in $50 million. In 2014, biotech debutantes raised a record $6.3 billion in IPO cash, a figure buoyed by increasing high valuations and investor fervor over new technologies.

- read Inotek's release (PDF)
- here's more on Carbylan