BUSY TIME FOR BIOTECH IPOS
Several biotech companies were able to price their initial public offerings (IPOs) in the past couple of months, although
they had to lower their expectations.
Tengion completed its IPO, pricing well below its initial range. The Pennsylvania-based regenerative medicine company, which
is focused on growing replacement organs from a patient's own cells, raised $30 million by offering 6 million shares at $5
per share. In its first filing in December 2009, the company had targeted raising $40.25 million, which it raised to $46 million
in an amended filing in mid-March. At that time, it planned to sell 4.4 million shares at a range of $8–10 per share.
Codexis raised $78 million through the sale of 6 million shares at $13 per share. Although the company priced at the low end
of its range, shares ended the month at $13.62, 5% above their initial offering price. The Redwood City, California-based
biotech develops biocatalysts used in the production of pharmaceuticals and renewable fuels and chemicals. Also in April,
Amyris Biotechnologies, another Bay Area company in the renewable energy space, filed a registration statement with the SEC
to go public through an IPO of up to $100 million of its common stock.
Alimera Sciences priced at $11 per share, 29% below its target range of $15 to $17, raised $72 million. The Alpharetta, Georgia-based
biotech's late-stage lead compound is a treatment for diabetic macular edema.
GenMark Diagnostics, which offers a molecular diagnostics testing system to hospitals and laboratories, raised $28 million
by offering 4.6 million shares at $6 per share, the low end of its revised $6–7 range. The company had originally planned
to sell 4.5 million shares at a range of $8–10 per share. The company closed its first day of trading down 10%.
To date, there now have been eight biotech IPOs completed this year and their average market performance as of the end of
May is –17.5% (Table 1).
BY THE NUMBERS
The industry closed the month of May with a collective market cap of $341.25 billion (down 10.7% for the month; down 2% YTD).
Fifty-six biotech companies (18.4%) have market caps greater than $1 billion (compared to 49 companies at the same time last
year). Ninety-three biotech companies (30.5%) have market caps less than $100 million (compared to 39% or 122 companies) at
the same time last year. The Burrill Biotech Select Index is down almost 5% (Table 2). Several companies completed secondary
financings in May including Pharmasset, which raised $101.1 million and Jazz Pharmaceuticals, which raised $58.5 million,
and will use the funds to repay a portion of its outstanding senior secured notes.
G. Steven Burrill is chief executive officer at Burrill & Company, San Francisco, CA, 415.591.5400, firstname.lastname@example.org