Solazyme's Strong Debut Augurs Well for Other Bioenergy Companies

May.29.11 | About: TerraVia Holdings, (TVIA)

By Marie Daghlian

Solazyme (SZYM) went public in an upsized IPO, pricing 11 million shares at $18 per share to raise $198 million. The South San Francisco-based renewable oil developer’s offering was buoyed by the strong performance of several industrial biotech companies that have recently gone public. Both Amyris (NASDAQ:AMRS) and Gevo (NASDAQ:GEVO) are trading at about 50 percent above their initial offering price.

Originally planning to offer about 10 million shares, Solazyme increased its offer by 1 million shares. Morgan Stanley and Goldman Sachs were lead managers of the offering. Underwriters have an overallotment option for an additional 1.65 million shares. Investors in the offering are happy. Shares were up 14.5 percent on the first day of trading on the Nasdaq under the symbol SZYM.

Solazyme develops renewable oils from genetically engineered algae grown in closed tanks. Like many renewables companies that started with a biofuel strategy, it quickly refocused its plans to produce high value renewable chemicals and bioproducts. Solazyme’s oils are used in a range of products from cosmetics and soaps to food ingredients and aviation fuel. The company has agreements with partners ranging from the U.S. Navy and Dow Chemical to L’Oreal and Roquette Freres for its entire commercial production through 2015.

Solazyme’s strong debut could be a good sign for other bioenergy companies in the queue such as KiOR and Ceres. Oil prices are likely to remain high, and more and more corporations are looking to diversify their product mix with the addition of chemicals and fuels from renewable sources.

In Cambridge, Massachusetts, two biotech drug developers raised capital in conjunction with partnering agreements. Proteostasis Therapeutics received a $20 million equity investment from Elan (NYSE:ELN) that includes a drug discovery partnership to advance its platform for small molecule drugs and diagnostics for the treatment of neurodegenerative disorders. Besides the equity investment, Proteostasis could get an additional $30 million in collaboration funding over five years.

As part of the agreement, Elan will become an approximate 24 percent shareholder in Proteostasis and have a right of first negotiation to exclusively license compounds emerging from the partnership.

Radius Health closed a $66 million tranched series C financing and a $25 million loan facility along with two deals to advance its bone-building drug into late-stage trials for the treatment of osteoporosis. The equity financing came from five new investors including BB Biotech, Brookside Capital, Saints Capital, Nordic Bioscience, and Ipsen Pharma, which were joined by existing investors MPM Capital, BB Biotech Ventures, MPM Bio IV NVS Strategic Fund, The Wellcome Trust, HealthCare Ventures, and Scottish Widows Investment Partnership.

Nordic Bioscience, a Danish contract research organization that specializes in osteoporosis treatments, will manage the clinical trials in Europe. At the same time, Radius Health will collaborate with 3M Drug Delivery Systems, a subsidiary of 3M Corporation (NYSE:MMM), on the development of a transdermal delivery option as an alternative to subcutaneous injection for Radius’ experimental treatment, BA058, a proprietary parathyroid hormone-related protein analog. Financial terms of their agreement were not disclosed.

DEALS FOR THE WEEK ENDING MAY 27, 2011

Global Venture Financings
Company Location Amount Raised (USD M) Principal Activity
Radius Health Cambridge, MA 66.0 Osteoporosis
Proteostasis Therapeutics Cambridge, MA 20.0 Drug discovery
Pathway Therapeutics San Francisco, CA 7.5 Cancer therapeutics
TetraLogic Pharmaceuticals Malvern, PA 6.0 Cancer therapeutics
Harvest Power Waltham, MA 6.0 Waste-to-energy
Casenet Bedford, MA 3.3 Healthcare software
Oncofactor Seattle, WA 2.1 Cancer therapeutics
GenKyoTex Switzerland 20.4 NOX enzyme inhibitors
Advicenne Pharma France 7.2 Renal, neurology
Themis Bioscience Vienna, Austria 7.1 Infectious disease drugs
Lumora Cambridgeshire, United Kingdom 2.4 Diagnostics
Abcodia United Kingdom 1.4 Biomarkers
ACS Biomarker Amsterdam, the Netherlands N/A Diagnostics
Total Raised US 110.9
Total Raised Non-US 38.5
Grants
Company Funding Agency Amount Raised (USD M) Principal Activity
Altor BioScience NIH NHLBI SBIR Phase II 3.0 Respiratory distress
Advantagene Massachusetts Life Sciences Center Cooperative Research Matching Grant 0.5 Cancer immunotherapy
Hepregen Massachusetts Life Sciences Center Cooperative Research Matching Grant 0.5 Liver model
Immunetics Massachusetts Life Sciences Center Cooperative Research Matching Grant 0.5 Infectious disease drugs
Reflectance Medical Massachusetts Life Sciences Center Cooperative Research Matching Grant 0.5 Metabolism sensors
Total Grants 5.0
Public Financings
Company Ticker Amount
Raised (USD M)
Financing Type
Solazyme SZYM 198.0 IPO
Moberg Derma (Sweden) SSE:MOB 11.6 IPO
Precise Biometrics (Sweden) SSE:PREC 8.7 PIPE
Genovis (Sweden) SSE:GENO 2.9 PIPE
Med BioGene (Canada) TSX-V:MBI 0.2 PIPE
WaferGen Biosystems OTC:WGBS 30.4 PIPE
Trius Therapeutics TSRX 30.2 PIPE
Celsion CLSN 8.6 PIPE
Rigel Pharmaceuticals RIGL 130.4 Follow on
Complete Genomics GNOM 68.8 Follow on
Metabolix MBLX 51.7 Follow on
Endo Pharmaceuticals ENDP 700.0 Debt
Kensey Nash KNSY 35.0 Unsecured credit facility
Radius Health Private 25.0 Loan facility
Ondine Biomedical (Canada) TSX:OBP 1.5 Debt financing
Total Public Financings-US 1,278.1
Total Public Financings-Non-US 24.9
M&A
Acquirer Target Deal Value
(USD M)
Focus
Watson Pharmaceuticals Specifar Pharma (Greece) 562.0 Generics
Valeant Pharmaceuticals (Canada) Sanitas (Lithuania) 446.0 Generics
Johnson & Johnson JB Chemicals & Pharmaceuticals (India) 260.0 OTC medicines
BioMerieux (France) AES Laboratoire (France) 257.8 Microbiological control
Intregra LifeSciences SeaSpine 89.0 Medical devices
Devicor Medical Products Neoprobe's GDS portfolio 50.0 Medical devices
Par Pharmaceuticals Edict Pharmaceuticals (India) 37.6 Generics
Kensey Nash Norian (Synthes-Switzerland) 22.0 Medical devices
Accelrys Contur (Sweden) 13.1 Software solutions
Abcam (United Kingdom) MitoSciences 6.0 Tools/Technology
Lab21 (United Kingdom) Myconostica (United Kingdom) N/A Diagnostics
Nestle (Switzerland) Prometheus Laboratories N/A Diagnostics
Sigma-Aldrich Vetec Quimica Fina (Brazil) N/A Specialty chemicals
BioCis Pharma (Finland) Lx Therapies (Finland) N/A Specialty pharma
Pharmascience (Canada) Aegera Therapeutics (Canada) N/A Cancer
Nkunzi Pharmaceuticals (South Africa) Merck South Africa operations N/A Pharmaceuticals
Alliances
Company/Licenser Company/Licensee Deal Value
(USD M)
Focus
Proteostasis Elan (Ireland) 30.0 Neurology collaboration
Aukland UniServices (New Zealand) Centella Therapeutics (Varian Medical Systems) N/A Cancer drug license
Centella Therapeutics (Varian Medical Systems) Cancer Research UK (United Kingdom) N/A Cancer drug collaboration
Daiichi Sankyo Pharma (Japan) AstraZeneca (United Kingdom) N/A Bone cancer drug co-promotion
PsychoGenics Evotec (Germany) N/A Neurology collaboration
Exagon Diagnostics Medco Health Solutions N/A Diagnostics partnership
Radius Health 3M Drug Delivery Systems N/A Osteoporosis collaboration
Roche (Switzerland) TeaRx (Russia) N/A Thrombosis treatment license
Eli Lilly BioCritica N/A Sepsis drug license
GE Massachusetts Institute of Technology N/A Ultrasound technology alliance
Medicago (Canada) US Army Medical Research Institute of Infectious Diseases N/A Ebola vaccine collaboration
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