Supernus IPO spotlights perils, potential of going public

Posted under Biotech IPO, Blog, Cempra Pharmaceuticals, ChemoCentryx, Companies, Diagnostics, Funding, Medical Devices, Medical Supply, Merrimack Pharmaceuticals, Pharmaceuticals, Pipeline, Startups, Supernus, Universities, Videos by john

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

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Osteoporosis drug developer Radius Health braves chilly IPO market

Posted under BA058, Biotech IPO, Biotech Venture Capital, Blog, Cempra Pharmaceuticals, Companies, Diagnostics, Funding, Ipsen, Medical Devices, Medical Supply, Merrimack Pharmaceuticals, osteoporosis, Pharmaceuticals, Radius Health, Startups, Universities, Verastem, Videos by John Carroll

After burning through more than $122 million, the late-stage osteoporosis drug developer Radius Health is filing to go public in the hope of raising up to $86 million. Radius is betting that it can whet the appetite of investors with the prospects for its pivotal trial for BA058. But over the past three years investors have been quick to pass on such offerings, put off by the heavy risk of failure that dogs every drug program.

Radius Health in-licensed BA058 from Ipsen and has been studying the treatment's ability to build bones in osteoporosis patients. As FierceBiotech noted in December, when the Cambridge, MA-based biotech drew down another tranche of its last $91 million venture round, Radius believes that it can significantly improve on current treatments, which are designed to slow bone loss and reduce pain in patients. Radius is also partnered with Eisai on a midstage treatment for hot flashes without the side effects associated with hormone therapy.

Radius, which is helmed by former Genzyme CFO Michael Wyzga, plans to list on Nasdaq under the RDUS symbol. The biotech did not list the number of shares it plans to offer or a price range.

Biotech IPOs have generally received rough handling on Wall Street. With the help of its backers, Christoph Westphal pulled off a successful initial offering for Verastem ($VSTM) recently. But Cempra's experience last week is more common. The company had to cut its share price in half and boost the number of shares sold to raise $50 million. Merrimack, a Boston biotech with five programs, recently pulled its IPO, citing market conditions.

A successful IPO here would be a coup for Radius' investors: MPM Capital, BB Biotech Ventures, MPM Bio IV NVS Strategic Fund, The Wellcome Trust, HealthCare Ventures and Scottish Widows Investment Partnership.

- here's the S-1 form on file at the SEC
- read the story from the Boston Business Journal

Special Report: The 10 biotech IPOs of 2011

Related Articles:
Radius Health pulls in $21.4M more for Phase III bone drug
VCs pump more cash into late-stage efforts as startup rounds shrivel
Fledgling Verastem outlines investor strategy behind high-risk $50M IPO
JPM kicks off with fevered focus on the next big biotech deal