By Marie Daghlian
Aegerion Pharmaceuticals (AEGR) expected to price its shares at $14 to $16 to go public this week, but with no takers by Friday morning, it lowered its offering price to $9.50 a share. The Bridgewater, New Jersey drug developer sold 5 million shares to raise $47 and began trading on the Nasdaq Global Market under the symbol AEGR. In its first day of trading, its price rose slightly to $10.80.
Aegerion’s late stage drug therapeutic is a treatment for homozygous familial hypercholesterolemia, a rare genetic disease that causes dangerously high levels of LDL cholesterol in the blood. The company plans to file for marketing approval in the United States and the European Union before the end of 2011 if the outcome of a current late-stage trial is successful.
It was the third try for Aegerion, after withdrawing efforts in 2007 and 2008 due to poor economic conditions. Investor reception for drug companies without revenues has been lukewarm at best, with most companies shaving at least a quarter off their expected offering price to complete their offerings. Post-IPO performance has not helped bolster enthusiasm with IPOs completed since August 2009 trading 24 percent below their initial offering price.
The story for Chinese healthcare companies has been quite different, where many offerings have been oversubscribed. As of August, Chinese life sciences companies have raised $6.1 billion in 23 offerings after the government lifted a moratorium on IPOs in August 2009.
ShangPharma (NYSE:SHP), one of China’s largest contract research organizations, went public this week on the New York Stock Exchange, trading under the symbol SHP. The company priced at $15 per share, in the middle of its expected range, and sold 5.8 million ADRs to raise $87 million. But its shares dropped 15 percent immediately following its debut and ended the week down 7 percent. Unlike many Chinese pharmaceutical companies that are riding on the growth of China’s economy and healthcare needs, the Shanghai-based CRO depends on U.S. pharmaceutical companies for more than a third of its revenue. ShangPharma’s two largest customers are Eli Lilly (NYSE:LLY) and GlaxoSmithKline (NYSE:GSK), and any strengthening of the Chinese currency, the yuan, could have a negative impact on its bottom line.
Redwood City, California-based Pearl Therapeutics closed a $69 million series C financing led by Vatera Healthcare Partners that included existing investors, Clarus Ventures, New Leaf Venture Partners and 5AM Ventures.
The money will be used to complete the phase 2b clinical program for Pearl's lead product, PT003, a combination bronchodilator for the treatment of patients with chronic obstructive pulmonary disease. Pearl expects to initiate late-stage clinical trials in late 2012.
Medical devices were the focus of the two largest M&A transactions. St. Jude Medical (NYSE:STJ) will acquire AGA Medical Holdings (AGAM) for $20.80 per share in a cash and stock transaction valued at approximately $1.3 billion, including the assumption of approximately $225 million in outstanding debt. The transaction is expected to be conducted as an exchange offer followed by a merger and to close by the end of the year.
AGA Medical, with sales of approximately $199 million in 2009, makes a comprehensive line of devices used to treat structural heart defects and vascular abnormalities through minimally invasive transcatheter treatments. The acquisition gives St. Jude Medical programs across all major categories that include structural heart defects, left atrial appendage occlusion, transcatheter aortic valve implantation and percutaneous mitral valve repair.
GE Healthcare is beefing up its presence in molecular diagnostics with the acquisition of Clarient (CLRT) in a tender offer for all its outstanding common and preferred shares. The $587 million deal is expected to accelerate the development of new integrated tools for the diagnosis and characterization of cancer. The board of directors of both companies have approved the transaction, which is expected to close in late 2010 or early 2011.
DEALS FOR THE WEEK ENDING OCTOBER 22, 2010
|Global Venture Financings|
|Company||Location||Amount Raised (USD M)||Principal Focus|
|Pearl Therapetuics||Redwood City, CA||69.0||Therapeutics-respiratory|
|Metabolic Solutions Development||Kalamazoo, MI||23.5||Therapeutics-metabolic|
|Ambit Biosciences||San Diego, CA||15.0||Therapeutics-cancer|
|SiOnyx||Beverly, MA||12.5||Medical devices|
|Minnow Medical||Laguna Hills, CA||4.7||Tools/Technology|
|Dicerna Pharmaceuticals||Watertown, MA||4.0||Therapeutics-RNAi|
|Innovative Pulmonary Solutions||Bellevue, WA||3.0||Medical devices|
|Dipexium Pharmaceuticals||New York, NY||1.4||Therapeutics-anti-infectives|
|Cerenis Therapeutics||Toulouse, France||13.9||Therapeutics-cardiovascular|
|Early Sense||Ramat, Israel||7.0||Patient monitoring|
|Redx Pharma||Liverpool, United Kingdom||3.0||Therapeutics-cardiovascular|
|Atox Bio||Rehovot, Israel||2.1||Therapeutics-infectious|
|Total Raised US||135.6|
|Total Raised Non-US||30.3|
|Grants and Contracts|
|Company||Funding/Contracting Agency||Amount Raised (USD M)||Principal Focus|
|Micronics||US Army Medical Research and Material Command||2.6||Blood screening|
|20/20 GeneSystems||National Cancer Institute SBIR||3.0||Personalized medicine|
|ViroXis||Texas Emerging Technology Fund||2.5||Dermatology therapeutics|
|Sequella||European Union||16.8||Tuberculosis trials|
|Population Genetics (UK)||Wellcome Trust||1.2||Genetic tests|
|Omeros||National Institutes of Health||3.6||Anti-addiction drugs|
|LifeGen Technologies||National Institutes of Health||0.1||Genetic screening|
|Bavarian Nordic (Denmark)||HHS BARDA||14.0||Smallpox vaccine|
|IntegenX||DoD DTRA||2.8||Pathogen Identification|
|Carestream Health||U.S. Department of Defense||10.0||Healthcare IT|
|Paragon Biosciences||U.S. Army Medical Research and Material Command||5.0||Vaccine development|
|Morphotek (Eisai-Japan)||U.S. Army Medical Research and Material Command||2.5||Bioterrorism|
|Total Grants and Contracts||64.1|
Raised (USD M)
|Zecotek Photonics (Canada)||TSX-V:ZMS||1.5||PIPE|
|Anadys Pharmaceuticals||ANDS||25.0||Follow on|
|OncoGenex Pharmaceuticals||OGXI||50.0||Follow on|
|Galapagos (Belgium)||GLPG.BR||40.0||Follow on|
|Hanger Orthopedic Group||HGR||200.0||Debt|
|MedQuist||MEDQ||225.0||Senior secured credit facility|
|Alimera Sciences||ALIM||32.5||Credit facility|
|ChemGenex Pharmaceuticals (Australia)||ASX:CXS||14.7||Convertible notes to Cephalon|
|TOTAL PUBLIC FINANCINGS-US||1,002.6|
|Acquirer||Target||Deal Value |
|St Jude Medical||AGA Medical||1,300.0||Medical devices|
|GE Healthcare||Clarient (Safeguard Scientifics)||587.0||Cancer Diagnostics|
|Pfizer||Laboratorio Teuto Brasileiro (Brazil)||240.0||Generics|
|Hanger Orthopedic Group||Accelerated Care Plus||155.0||Healthcare|
|LFB Biotechnologies (France)||GTC Biotherapeutics||17.0||Rare diseases|
|Cephalon||BioAssets Development||12.5||Spinal indications|
|Vascular Solutions||Radius Medical||6.5||Medical devices|
|Solta Medical||CLRS Technology||1.1||Medical Aesthetics|
|Company/Licensee||Company/Licenser||Deal Value |
|Pfizer||Biocon (India)||350.0||Insulin biosimilars agreement|
|Salix Pharmaceuticals||Photocure (Norway)||130.5||Diagnostics license|
|Allist Pharmaceuticals (China)||ProMetic Life Sciences (Canada)||59.0||Drug development agreement|
|Smith & Nephew (United Kingdom)||Nanotope (Arrowhead Research)||26.6||Cartilage regeneration collaboration|
|Al Mokhtabar Laboratories (Egypt)||Perceptronix Medical (Canada)||N/A||Technology partnership|
|Novartis (Switzerland)||ChemRar High-Tech Center (Russia)||N/A||Drug discovery collaboration|
|Cylene Pharmaceuticals||Horizon Discovery (United Kingdom)||N/A||Personalized medicine collaboration|
|Cellectis (France)||Midwest Oilseeds||N/A||Crop traits license|
|Eli Lilly||AbCheck (Czech Republic)||N/A||Drug discovery collaboration|
|Seegene (Korea)||Biosearch Technologies||N/A||Diagnostics license|
|Algeta (Norway)||Lumiphore||N/A||Technology license option|