Step-Ups in Valuations of Anti-Infective Company IPOs
This article was originally published in Start Up
Executive Summary
Recent offerings of anti-infective companies have seen impressive step-ups in valuations from last private round to IPO, ranging from 70% to 500%.
Investors are going after bugs with a vengeance, placing $130 million in IPOs of anti-infective companies in the past eight months. All have fared extremely well with market caps growing anywhere from 70% to over 500% from last private to public round (with the exception of Virus Research Institute, where investors proved to be less enthusiastic for vaccines). Microcide and Cubist share a common strategy of targeting drug-resistant microbes and have assured themselves steady streams of revenues from multiple large pharma partnerships. Viropharma promises an oral pill for the common cold. But early investors, IPO investors and even last month's investors in Triangle Pharmaceuticals have seen spectacular increases in their investments, with no recent announcements to account for the run-up in share price. Triangle's experienced management (Wellcome's former antiviral group, including the coinventors of AZT and acyclovir) has been able to build a portfolio of seven antiviral compounds, all at least in the preclinical stage, many related to compounds with proven efficacy.