Three Life Science Companies Line Up for IPOs

by Marie Daghlian

It all comes down to capital and how to get it—through the public markets, VCs, or dealmaking. This week three companies raised the possibility that the biotech IPO window might be cracking open. First private equity owned Talecris (TLCR) took its show on the road, offering an initial 44.7 million shares priced at $18 to $20. If successful, the IPO could generate $850 million for Talecris and its major shareholder, Cerberus Partners.

Talecris was spun out of Bayer in 2005 and filed for a $1 billion IPO in 2007, which was scuttled when Australian biotech CSL Limited (CMXHY.PK) made a $3.1 billion bid for the company. The U.S. Federal Trade Commission blocked the deal due to antitrust issues. As they say, third time’s a charm. The company has enlisted a bevy of bankers to market its deal. Morgan Stanley, Goldman, Sachs, Citigroup Global Markets, and J.P. Morgan Securities are acting as joint book-running managers and Wells Fargo Securities, Barclays Capital. and UBS Investment Bank are acting as co-managers.

Two more biotech companies also joined the IPO queue. Anthera Pharmaceuticals, a small biotech based in Hayward, California, filed to sell up to $70 million in stock to fund its drug development programs. Anthera, which has yet to generate revenue, is focused on inflammatory diseases and has one drug ready for phase III clinical trials and two drugs ready for phase II trials, including a lupus drug licensed from Amgen (AMGN). Anthera has lost about $60 million since its founding in 2004.

Seattle-based Omeros (OMER) launched its IPO on Friday, offering 6.82 million shares of its common stock, priced at $10 to $12 per share, which could generate as much as $81.8 million for the biotech. Omeros is focused on inflammation and disorders of the central nervous system. Its drugs are designed to improve clinical outcomes of patients undergoing surgical and other medical procedures and its lead candidate is currently being evaluated in phase III clinical trials for use during arthroscopic surgery to improve postoperative joint function and reduce postoperative pain.

Omeros has applied to have the shares of common stock listed on The NASDAQ Global Market under the ticker symbol "OMER." The underwriters have the option to purchase up to an additional 1.02 million shares to cover any over-allotments. Deutsche Bank Securities is acting as the sole book-running manager and Wedbush PacGrow Life Sciences is acting as the co-lead manager, with Canaccord Adams and Needham & Company acting as co-managers, and Chicago Investment Group and National Securities acting as junior co-managers.

Omeros was founded in 1994 and has no marketed products. It has gone through more than $108.8 million of investors’ money since its inception, according to its latest prospectus.

A sizable amount of venture capital was raised during the week, including some impressive rounds. Calypso Medical Technologies, a developer of real-time localization technology used for the precise tracking of tumor targets, completed a $50 million round of venture capital financing led by Skyline Ventures and Frazier Healthcare Ventures, with participation from Bay City Capital, InterWest Partners, and previous investors. Proceeds will be used to expand the commercial expansion of Calypso’s radiation-pinpointing technology, which it markets as “GPS for the Body.”

Cambridge, Massachusetts-based Seaside Therapeutics secured $30 million in financing from a private, family investment firm that is committed to advancing research in the field of autism and Fragile X Syndrome. The new capital will be used to fund Seaside's pipeline of novel therapeutic candidates to correct or improve the course of those who suffer these disorders. The financing brings the total capital raised by Seaside to $66 million.

Juvaris BioTherapeutics, a Burlingame, California-based biotech developing adjuvanted vaccines for infectious diseases, completed the first close on its Series B equity financing of up to $25 million led by SV Life Sciences along with existing investor Kleiner Perkins Caufield & Byers. The funds will be used to advance Juvaris’ novel adjuvant platform of cationic-lipid DNA complexes, which are designed to significantly improve the quality and quantity of immune responses achievable with vaccines.

Alvine Pharmaceuticals, a San Carlos, California biotech focused on developing and commercializing therapeutics for autoimmune/gastrointestinal diseases, closed a $21.5 million extension of its Series A financing, led by new investor Panorama Capital with participation from founding investors InterWest Partners, Prospect Venture Partners, Sofinnova Ventures, Black River Asset Management and Flagship Ventures.

Proceeds will fund a recently initiated phase IIa clinical trial of its lead compound ALV003 for the treatment of celiac disease.

And another Cambridge, Massachusetts biotech, Pervasis Therapeutics, completed the initial closing of a $17 million third round of financing by previous investors Flagship Venture Partners, Polaris Venture Partners and Highland Capital Partners. In addition, the Richter Family Fund participated for the first time. Proceeds will be used primarily to support the company's ongoing clinical development programs and to advance its lead program, Vascugel, which is being developed to prevent arteriovenous access failure in hemodialysis patients.

Massachusetts biotech ImmunoGen (IMGN) got $1 million upfront by licensing its anticancer technology to Amgen. The deal could be worth as much as $34 million more in milestones and royalties on sales of any products resulting from Amgen's use of ImmunoGen's maytansinoid Targeted Antibody Payload technology to develop anticancer therapeutics to an undisclosed target found on solid tumors.

Investors in Innovative Spinal Technologies of Mansfield, Massachusetts, will not see much of their money returned to them. The medical device company was sold in a bankruptcy auction to Integra Life Sciences Holdings (IART) for $9.25 million in cash.

Another Massachusetts biotech bid good bye. Altus Pharmaceuticals (ALTU) is winding down its operations and closing its doors by the end of October. Finally, Cambridge, Massachusetts-based Helicos Biosciences (HLCS) got a temporary lifeline of $10 million from a group of investors that included Atlas Ventures, Flagship Ventures, Highland Capital Partners, Versant Ventures, and Helicos CEO Ron Lowy. The money came a month after Helicos disclosed in its quarterly report that it was down to its last $5 million of cash.

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