Spring shoppers pick up discount deals
This article was originally published in Scrip
The announcements this week of the acquisitions of Cambridge UK-based Astex Therapeutics by SuperGen, and Inspire Pharmaceuticals by Merck might be heralded as the long-awaited thaw in the sector, another symptom of which has been the lack of initial public offerings. Both transactions however, together with the US IPO of Tranzyme however, more closely represent a continuation of the distinctly chilly backdrop for the life science space.
NASDAQ-listed SuperGen announced the merger with private Astex Therapeutics Ltd for $25m in cash and stock, and the possibility of another $30m over the next two and a half years, again in either stock or cash (scripintelligence.com 7 April 2011). Astex’s last major fundraising was back in 2001 when they raised $40.6 million at a valuation rumoured to be about $200 million. There have been additional cash infusions into the company over the years since 2001 as milestone payments from the Wellcome Trust, AstraZeneca or Novartis, and the merger with Berlin-based metaGen added $39 million in cash. As these infusions were probably used by the company, rather than distributed to investors, Astex’s backers will not have seen the healthy return they expected at the close of the last round in December 2001.
Earlier on in the week, Merck announced the acquisition of Inspire Pharmaceuticals for $430m in order to acquire their ophthalmology business and pipeline (scripintelligence.com 6 April 2011). The Inspire share price fell 60% in January when their cystic fibrosis drug failed in phase III. With the pulmonary franchise effectively terminated in January, the cash of about $1 a share and the ophthalmology business valued by analyst Jo Schwartz of Leerink Swann at about $4 a share, the acquisition by Merck at $5 a share looks like a bargain basement transaction. Certainly the lawyers initiating class-action suits on behalf of Inspire shareholders against the company think so!
Earlier in the week Tranzyme was forced to cut its IPO share price from $12 at the mid-point of the range down to $4 (scripintelligence 5 April 2011). The company almost tripled the number of shares raised and much was made at the time of the dilution suffered by the VCs due to this increased issue of stock. Spare a thought, however, for the public market investors who initially thought that they were paying $12 a share to invest in Tranzyme, were probably very pleased to hear of the discount down to $4 a share, but unless they read the section in the SEC filing on page 39 that warned about dilution, now find that $4 representing only about a third of the company they were expecting when the IPO was first announced. It may be spring in the northern hemisphere, but it certainly still feels like winter to biotechnology investors.
| Company
| Date
| $ mill
| Notes
| Price $
| |
| IPO
| +30 days
| |||
| Tibet Pharmaceuticals
| 24 January
| 16.5
|
| 5.50
| 4.70
|
| Pacira Pharmaceuticals
| 3 February
| 42.0
| Had hoped to raise $69-79 million at $14-16
| 7.00
| 7.05
|
| Endocyte
| 4 February
| 86.3
| Issued 2.3x the number of share they originally planned
| 6.00
| 7.29
|
| BG Medicine
| 4 February
| 40.3
| Had planned to raise $86 million
| 7.00
| 8.69
|
| RedHill BioPharma (Israel)
| 7 February
| 13.6
| Planned to raise 20% less
| 3.50
| 3.25
|
| Fluidigm
| 10 February
| 69.8
| Hoped for $86.3 million
| 13.50
| 14.35
|
| AcelRx Pharmaceuticals
| 11 February
| 40.0
| Had sought $75-80 million
| 5.00
| 3.17
|
| Tranzyme
| 1 April
| 54.0
| Dropped IPO price to $4 from $11-13
| 4.00
| NA
|
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| Clarus Therapeutics
| Scheduled 8 February
|
| Hoped to raise $60 million but IPO withdrawn
|
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| Iaso Pharma
| Scheduled February
|
| Hoped to raise $23 million but IPO withdrawn
|
|
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| Philogen
|
|
| IPO withdrawn 15 February
|
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| Atossa Genetics
|
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| IPO withdrawn 15 February
|
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