THE BEST AND THE WORST PERFORMERS
Stemline Therapeutics, for that period, stood as the best performer in the group with a 70% increase from its IPO price. Stemline
completed its IPO at the end of January, raising $38 million, but only after cutting the price of its offering to $10 a share,
below its $11 to $13 target. The clinical-stage biopharmaceutical company is developing therapeutics that target cancer stem
cells, as well as tumor bulk.
KaloBios Pharmaceuticals, which raised $70 million in an initial public offering also at the end of January, is the worst
performer in the group. Its shares at the end of May traded at nearly 30% less than the IPO price. The biotech company is
developing antibody drugs to treat respiratory diseases and cancer. To get its IPO done, the company cut its offering price
by 38% from the midpoint of its original target range and more than doubled the number of shares it offered.
Investors have continued to remain selective and demanding on price. Of the 17 issues, nine priced below their target range
and seven priced within their target range. Zoetis, the animal health spin-out from Pfizer, was the only issue to price above
its range. Companies on average priced 17% below their targets and sold 35.4% more shares than they had planned.
The $4.1 billion raised through the first five months of 2013 has already surpassed the $2.1 billion raised in all of 2012.
It is already the biggest year for life-sciences IPOs since 66 initial public offerings in 2000 raised $6.5 billion. The total
raised by life-sciences IPOs this year has been buoyed by the $2.6 billion raised by Zoetis, as well as the $525 million raised
by Quintiles Translational Holdings, the world's largest provider of outsourced clinical services. The Quintiles deal, which
was upsized and completed at the top of its range at $40, included a substantial number of shares for selling shareholders.
The offering totaled $942 million, but only $525 million represented shares sold by the company. Those two offerings represent
more than three quarters of the total raised through the first five months of the year.
This year's performance to date underlines the fact that biotech is no longer a fledgling industry with unpredictable risks
for investors or with limited periods of enthusiasm for companies to capitalize upon as financing opportunities. It's not
a question of whether a company can go public today, or any day, but what price they are willing to accept.
G. Steven Burrill is chief executive officer at Burrill & Company, San Francisco, CA, 415.591.5400, email@example.com