Key to IPO success: recruiting 'insiders' who will buy into the offering

The Scientist takes a crack at covering the few courageous--or is it foolhardy?--biotech companies willing to go public these days. Steven Burrill notes that there's no appetite for risk, echoing a common theme on Wall Street. And with precious few biotechs de-risked, there are precious few new offerings.

One key ingredient for success? Recruiting the kind of investors who are willing to follow up and buy into your IPO. Ironwood CEO Peter Hecht notes he "sort of cheated" at his IPO, with insiders buying up 40% of its IPO.

"If you look at the IPOs in the biotech space over the last couple of years, they've all had significant insider participation in order to make it possible," NewLink Genetics CFO Gordon Link tells The Scientist. And Atlas' Bruce Booth calls insider participation biotech's "dirty little secret."

- here's the story from The Scientist

Special Report: The 10 biotech IPOs of 2011