By Marie Daghlian
As U.S. legislators wrangled over raising the debt ceiling, Horizon Pharma (HZNP) priced its initial public offering just below its $10 to $12 per share target range to begin trading on the Nasdaq Global Market. It was the only life sciences IPO in the United States during a hot July that saw 14 companies go public. Horizon, which develops drugs to relieve the pain of arthritis and other inflammatory diseases, sold 5.5 million shares at $9 per share, raising $50 million to support its programs.
The Northbrook, Illinois pharmaceutical has yet to make a profit. It received U.S. marketing approval in April for Duexis, a combination of ibuprofen and famotidine, approved to relieve rheumatoid arthritis and osteoarthritis pain. The drug is designed to reduce the incidence of upper gastrointestinal ulcers that can result from taking ibuprofen alone. Horizon will use most of the proceeds from its offering to launch Duexis, which it plans to do in the fourth quarter of this year. The pharma also plans to submit a new drug application for its second arthritis drug, Lodotra, a low-dose prednisone, before the end of the third quarter. It is already approved in Europe and marketed there by distribution partners Merck and Mundipharma.
Wall Street had a mixed reaction to the offering. While investors in IPOs from retailers Teavana (TEA) and Dunkin’ Donuts (DNKN) saw their shares rocket more than 50 percent, Horizon’s shares barely moved. Trading under the symbol HZNP, they rose 15 cents during their first trading day and ended the week just a penny above their initial price. The company has granted underwriters a 30-day option to purchase up to an additional 825,000 shares at the initial public offering price to cover overallotments, if any. Stifel Nicolaus Weisel, Cowen and Company, and JMP Securities were joint bookrunners for the offering.