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By Marie Daghlian

Epocrates’ (NASDAQ:EPOC) strong IPO on the Nasdaq market validated the company’s strategy—that doctors will welcome technology if it helps their daily practice. The San Mateo, California based digital health firm made its stock market debut on February 2, raising $85.8 million through the sale of 5.4 million shares at $16 each. The offering raised 14 percent more than planned as shares were sold above the target range of $13 to $15.

More than a million doctors are registered as users on Epocrates’ online information network that allows doctors and healthcare professionals to access information about drugs, diseases, insurance, lab data, and patient data from their mobile devices at the point of care. The company offers several free apps besides its premium products and makes most of its revenue from pharmaceutical companies that want to capture those eyeballs and conduct market research.

Epocrates counts 45 percent of U.S. physicians as users of its network, according to a company filing. Revenues have been growing steadily. While the company posted a profit in 2009, net income dropped in 2010 due to expenses related to developing an electronic health record product and preparing to go public.

Epocrates partnered with pharma giant Pfizer (NYSE:PFE) in June to give healthcare providers mobile access to Pfizer's medical information through its drug reference app for the iPhone. In November, it acquired software maker Modality for $13.8 million for its iPod Touch and iPhone applications and infrastructure.

Investors were bullish about the company. Shares started trading at $20 and ended the week at $26.51, soaring 66 percent above the offering price in the first three days on the market.

Six other life sciences companies attempted to go public during a busy week, but only four were successful. Tornier (NASDAQ:TRNX), a 70-year-old Dutch orthopedic medical device company, raised $166.3 million and began trading on Wednesday on the Nasdaq Global Select Market. Tornier priced 8.75 million shares at $19 a share, at the low end of its target range of $19 to $21. Shares fell at the start of trading and ended the week at $18.38, down 3.3 percent.

There was little investor love for three earlier stage biotechs with little to no revenue. All had to slash their prices to get their deals done. Pacira Pharmaceuticals (NASDAQ:PCRX) sold 6 million shares at $7 per share to raise $42 million, one third less than it had hoped to get if the shares had been sold at the target range of $14 to 16. Pacira had $17 million in sales for the 12 months ending September 30, 2010. The company has developed an extended releast technology. It has two marketed products and a non-opoid postsurgical analgesic pending U.S. Food and Drug Administration approval, expected in July.

Cardiovascular diagnostics company BG Medicine (NASDAQ:BGMD) priced its initial public offering of 5 million shares at $7 per share, half of its expected $13 to $15 range, to raise $35 million. Shares were up 13.6 percent in early trading.

Cancer drug developer Endocyte (NASDAQ:ECYT) changed its IPO terms twice in two days to get out of the gate. The company, which is raising capital to fund a late stage trial of its ovarian cancer therapeutic and a companion imaging diagnostic tool, originally planned to raise $75 million by selling 5.4 million shares at $13 to $15. It did raised $75 million but it had to double the shares offered and more than halve the price to do so—selling 12.5 million shares at $6 per share. Burrill & Company, publisher of The Burrill Report, is an investor in Endocyte.

Two other companies have delayed their offerings. Dental implant maker BioHorizons postponed its IPO indefinitely (BHZN) and pain drug developer AcelRx (NASDAQ:ACRX) delayed its IPO until the second week of February.

DEALS FOR THE WEEK ENDING FEBRUARY 4, 2011

Global Venture Financings
Company Location Amount Raised (USD M) Principal Activity
Spiracur Sunnyvale, CA 35.0 Wound care
Glaukos Laguna Hills, CA 29.5 Ophthalmic
Spine Wave Shelton, CT 17.5 Spinal disorders
IntegenX Pleasanton, CA 15.6 Sample preparation
Ocular Therapeutix Bedford, MA 14.0 Ophthalmology
Rib-X Pharmaceuticals New Haven, CT 5.5 Antibiotics
Computable Genomix Memphis, TN N/A Pharmacogenetics
Entheogen Cambridge, MA N/A Neurology
Cellnovo London, UK 48.4 Diabetes
Scil Proteins Halle, Germany 33.1 Cancer
Plasticell London, UK 3.2 Stem cells
Oval Medical Technologies Cambridge, UK 1.7 Drug delivery
Total Raised US 117.1
Total Raised Non-US 86.4
Grants
Company Funding Agency Amount Raised (USD M) Principal Activity
Bohai Pharmaceuticals (China) Chinese government 0.1 Traditional Chinese Medicine
PTC Therapeutics Parent Project Muscular Dystrophy 0.3 Post-transcriptional control processes
Mobius Therapeutics St Louis BioGenerator N/A Ophthalmic
SFC Fluidics National Science Foundation 0.6 Microfluidics
Quantum Genomics (France) National Research Agency 1.9 Hypertension
Digna Biotech (Spain) European Union grant to AIPGENE consortium 0.7 Gene therapy
Total Grants 3.6
Public Financings
Company Ticker Amount
Raised (USD M)
Financing Type
Tornier (Netherlands) TRNX 166.3 IPO
Pacira Pharmaceuticals PCRX 42.0 IPO
BG Medicine BGMD 35.0 IPO
Epocrates EPOC 85.8 IPO
Endocyte ECYT 75.0 IPO
Active Biotech (Sweden) SSE:ACTI 56.7 PIPE
Helix BioMedix OTC:HXBM 0.6 PIPE
Radient Pharmaeuticals RPC 7.5 PIPE
Athersys ATHX 13.1 PIPE-DPO
Living Cell Technologies (New Zealand) ASX:LCT 1.7 PIPE
Weikang Bio-Technology (China) OTC:WKBT 5.0 PIPE
Angel Biotechnology (UK) LSE:ABH 3.1 Placing
Avacta Group (UK) LSE:AVCT 3.1 Placing
Oxford BioMedica (UK) LSE:OXB 32.3 Placing
Ligand Pharmaceuticals LGND 20.0 Debt
Savient Pharmaceuticals SVNT 200.0 Debt
Valeant Pharmaceuticals (Canada) VRX 650.0 Debt
Oncolytics Biotech (Canada) TSX:ONC 6.8 Warrant exercise
Helix BioMedix OTC:HXBM 2.3 Warrant exercise
ArtVentive Medical Group OTC:AVTD 10.0 Committed financing agreement
Total Public Financings-US 491.3
Total Public Financings-Non-US 925
M&A
Acquirer Target Deal Value
(USD M)
Focus
Valeant Pharmaceuticals (Canada) PharmaSwiss (Switzerland) 481.0 Generics
Biovail/Valeant (Canada) GlaxoSmithKline's Zovirax (UK) 300.0 Pharmaceuticals
Vale (Brazil) Biopalma (Brazil) 173.5 Industrial/Ag
Medline Industries CareFusion 130.0 Surgical products
Alexion Pharmaceuticals Taligen Therapeutics 111.0 Inflammation
Kensey Nash Nerites Corporation 20.0 Surgical products
Trinity Biotech (Ireland) Phoenix Biotech 2.5 Diagnostics
Cynosure Eleme Medical 2.5 Medical devices
Nycomed (Switzerland) Laboratorios Farmacol (Colombia) N/A Pharmaceuticals
IntegenX GenVault N/A Genomic tools
International Chemicals Investors Group Genzyme N/A Pharmaceuticals
Intrexon Agarigen N/A Agbio
OPKO Health CURNA N/A Tools/Technology
Alliances
Company/Licenser Company/Licensee Deal Value
(USD M)
Focus
MAP Pharmaceuticals Allergan 157.0 Co-promotion of migrain drug
Hansen Medical Phillips Healthcare (Netherlands) 107.0 Medical technology license
Marina Biotech Debiopharm (Switzerland) 25.0 Cancer drug collaboration
Merck KGaA (Germany) Apeiron Biologics (Austria) N/A Cancer drug license
Bristol-Myers Squibb Paladin Labs (Canada) N/A Marketing license for pediatrics
HealthCore (Wellpoint) AstraZeneca (UK) N/A comparative effectiveness collaboration
START Cenova Ventures (China) N/A Clinical trials joint venture
Partek Life Technologies N/A Gene sequencing partnership
Pfizer Japan Takeda Pharmaceutical (Japan) N/A Co-promotion agreement in Japan in RA
Tacere Therapeutics Oncolys BioPharma (Japan) N/A Infectious therapeutic rights

Source: Epocrates' Strong Market Reception: Five Life Sciences Leave the Gate Last Week