|David J. Mazzo, president and CEO of Regado Biosciences|
Regado Biosciences' attempt to benefit from the current IPO frenzy has misfired.
The Basking Ridge, NJ-based biotech had set out to raise around $75 million by selling 5 million shares at $14 to $16 apiece, but had to reconfigure the numbers to 8.4 million shares at $5 a pop when investors failed to line up. At that price Regado would raise $42 million.
Late last year Regado ($RGDO) came up with a big $51 million round that served as a kind of down payment on a planned $120 million study of its lead therapy--an anticoagulant that adds a promising "real-time" therapeutic tool to dial the effect up and down in order to control bleeding risks. The IPO was initially designed to cover the rest of that expense, but now leaves the biotech short on the full tab--barring another raise.
Domain Associates, Quaker Partners, Aurora Funds, Edmond de Rothschild Investment Partners, Caxton Advantage Life Sciences Fund and, more recently, Rusnano have all been willing to dig deep in the belief that Regado could come up with a new standard of care for a major market. Former Fastenal CEO Robert Kierlin owned about 26% of the company before the last round.
Regado's IPO is the 31st such maiden offering for a biotech this year. That compares with an anemic 11 for all of last year. But since an explosion of biotech IPOs hit in the second quarter, analysts have been fretting over how long this streak can go before cracking up. Biotech blogger Derek Lowe noted today that "you'd have to think that we're getting near the bottom of the sack by now. Whatever gets pulled up at this point has a greater likelihood of having all kinds of stuff stuck to it, and it might not be in good enough condition for your portfolio to consume it. Soon we'll probably be in the part of the cycle where good companies, who would have happily launched themselves into the market a few months before, get whipsawed by a closing IPO window."
- here's the report from Nasdaq
Special Report: Is the biotech IPO frenzy headed for a crack-up?