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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Merrimack Pharma stumbles out of the IPO gate

Merrimack Pharma stumbles out of the IPO gate

Posted under Biotech IPO, Blog, Cancer Drugs, Companies, Diagnostics, Funding, IPO, irinotecan, Medical Devices, Medical Supply, Merrimack Pharmaceuticals, MM-398, Pharmaceuticals, Pipeline, Sanofi, Startups, Universities, Videos by rmcbride

Merrimack Pharmaceuticals ($MACK) had a rough first day of trading Thursday. The Cambridge, MA-based company's shares fell 13.7% from the opening price of $7 per share, giving the developer of cancer drugs a lackluster public debut.

The developer, a 2011 Fierce 15 company, saw its shares fall soon after investors began trading its stock on the Nasdaq. According to MarketWatch, the company had sold 16.7 million shares of common stock in its IPO at $7 per share, below the range of $8 to $10 the company originally sought in its maiden public offering. The company had ditched plans for the bigger IPO before succeeding with the smaller offering this week.

Success can be messy. Merrimack stumbled a bit on its first day of trading, but very few privately held biotechs are able to pull off IPOs in the wintry climate for the deals nowadays. The company has 5 drugs in clinical trials, including an anti-cancer antibody drug dubbed MM-121 in mid-stage development with partner Sanofi ($SNY). That program emerged via Merrimack's discovery platform that involves using computational elements to understand the complexity of diseases.

Merrimack's lead drug is a nanoencapsulated version of the chemo drug irinotecan called MM-398, and part of the reason for the IPO was to fund Phase III development of the drug for treating aggressive prostate tumors.  

- check out the MarketWatch article

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Merrimack Pharma discounts expectations in $100M IPO

Posted under Blog, Cancer Drugs, Companies, Diagnostics, Funding, IPO, Medical Devices, Medical Supply, Merrimack Pharmaceuticals, Pharmaceuticals, Pipeline, Startups, Universities, Videos by john

Merrimack Pharmaceuticals, a Cambridge, MA-based developer with 5 cancer therapies in the pipeline, is hoping that it can finally pull off an IPO after significantly reducing the amount of money it hopes to raise while cutting the proposed share price. Merrimack earlier pulled the plug on its $166 million IPO, which had sought investors willing to pay $8 to $10 a share. Now it's looking for $100 million by selling 14.3 million shares at $7 each, Renaissance Capital reports. The effort values the company at $647 million. Biotech IPOs have been tough to pull off ever since the 2008 financial crisis. But a growing number of hardy companies have pushed ahead in any case, often suffering from a common need to cut their prices and accept less than hoped for. A few IPOs have been successful, though, largely due to the active support of a loyal group of financial backers. We recognized Merrimack as a Fierce 15 company last year. Story

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

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