Supernus IPO spotlights perils, potential of going public

Supernus Pharmaceuticals came out of the IPO gate this morning, pricing its shares at a hefty discount in order to complete its long-planned effort to go public. The Rockville, MD-based biotech priced 11.5 million shares at $5 apiece in an IPO ($SUPN) that leaves a big chunk of its equity in the hands of its venture backers. 

Supernus had tried to attract interest from investors in a $12 to $14 per share price range on 5.8 million shares. But like a long lineup of biotech companies before it, the developer had to slash the price while expanding the number of shares sold to complete the task. Citi and Piper Jaffray are the joint bookrunners.

The IPO market for biotechs has been so bad for so long now that any word of a fresh attempt is often greeted with wisecracks. But as Luke Timmerman at Xconomy noted in his column this week, there are signs of some kind of life. He ran the numbers on the four biotech IPOs mounted so far this year--Merrimack ($MACK), ChemoCentryx ($CCXI), Cempra ($CEMP) and Verastem ($VSTM)--and concluded that they had all held their own, or better, on share price. And another seven were lined up with S-1s and plans of their own, including Supernus.

"I'd say there are some rumblings of positivity," Arch Venture's Bob Nelsen tells Timmerman, who concludes that the industry should be on track to see a growing number of IPOs in 2012. 

But the Supernus haircut today illustrates why the party hats and champagne bottles will be kept far away from the IPO party. These days the big numbers are being seen on the M&A side of the business, where Big Pharma companies are willing to pay solid premiums to snap up the drugs they need.   

- here's the press release