Aegerion's IPO Prices Well Below Expectations: The Week in Biotech Deals

by: The Burrill Report

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.


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
Quanterix Cambridge, MA 2.5 Diagnostics
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
MemfoACT Trondheim, Norway 4.3 Industrial/Ag
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
Company Ticker Amount
Raised (USD M)
Financing Type
ShangPharma NYSE:SHP 87.0 IPO
Aegerion Pharmaceuticals AEGR 47.5 IPO
Zecotek Photonics (Canada) TSX-V:ZMS 1.5 PIPE
Cell Therapeutics CTIC 21.0 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
Cubist Pharmaceuticals CBST 400.0 Debt
MedQuist MEDQ 225.0 Senior secured credit facility
Alimera Sciences ALIM 32.5 Credit facility
Encorium Group ENCO 1.6 Other
ChemGenex Pharmaceuticals (Australia) ASX:CXS 14.7 Convertible notes to Cephalon
Non-US 143.2
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