Biotech IPOs under investor microscope

Francois Rowell
12 April 2010

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The recent flurry of biotechs seeking to raise capital on the public markets could prove mistimed as question marks are raised over investor appetite. FranУЇois Rowell investigates.

Neovacs, a Paris-based company focused on immunotherapy founded as a spin-off from the Pierre & Marie Curie University, was recently looking to raise €20m on the Paris stock exchange. Last week, the firm was forced to revise its pricing, reducing its target to €11m before listing. The slow investor uptake has many questioning whether Neovacs could indeed be the last biotech firm to make it onto the public market for a while.

On the other hand, the Neovacs listing may just be a stuttering start by a rusty machine – it is the first new biotech IPO in France in more than two years. Elsewhere, signs have been more encouraging for publicly listed biotech firms and indeed IPOs. German biotech company Epigenomics raised €33.1m in a successful rights issue earlier this month, while biotech firms NicOx, Cellectis and Innate Pharma have successfully attracted investors with their rights issues over the past year.

Therefore, the success later this month of scheduled listings for two French biotech firms, AB Science and Deinove, will certainly be a strong indication of whether the biotech IPO window is rapidly closing or if the Neovacs re-pricing case was a one off.

Truffle Capital-backed Deinove is seeking to raise €15m while AB Science is looking for €55.5m. Deinove's book building range is set between €7.50-9.16 while AB Science lies between €13.95-17.05. The final price for both the listings will prove a vital indicator of the appetite in the biotech market. The book building processes for AB Science and Deinove close on April 20th and 21st respectively.

A number of scheduled large IPOs ground to a halt earlier this year after investor appetite faltered. This resulted in IPO candidates either readjusting their pricing at a lower level – as highlighed by the French carehome firm Medica flotation – or delaying their listings altogether.

Indeed, should the listings of AB Science and Deinove falter, venture investors might have to revise their IPO schedules.