IPOdesktop's  Instablog

Today Medley Capital today priced its IPO at $11, down 18.5% from the range mid-point of $13.50.  MCC is trading now up 9%. 

Just as $13.50 was too high, $11 was too low on a valuation basis.

At $13.50 MCC was trying to get a 1.8% premium to net asset value.  That didn't work because typically Business Development Corps (BDC's) don't get a premium to net asset value. 

For example, Golub Capital (GBDC), THL Credit (TCRD) and Gladstone Cap (GLAD) were selling yesterday at discounts to net asset value of 0%, -2% and –2% respectively.




Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Nov 15wk IPO calendar

Zogenix (ZGNX) $78mm IPO
with a market cap of $299mm at the prince range mid-point of $13
Scheduled for Wednesday, November 17, 2010

ZGNX Valuation Metrics

CONCLUSION
. Interesting company successfully introducing a new product that generated $15mm in sales since introduced in January of 2010
. However, SG&A expenses ballooned to an annual run rate of $54mm for the nine months ended September 30, 2010.  The nine month loss was $51mm
. Zogenix is worth watching if it in fact IPOs and reduces SG&A expenses so that breakeven is in sight

BUSINESS
Products for the treatment of central nervous system disorders and pain, especially migraine and cluster headache
. First commercial product, Sumavel™ DosePro™ (sumatriptan injection) Needle-free Delivery System, was launched in January 2010.

EXPERIENCE TO DATE
Prescription Trends.
Monthly prescription data shows that more than 11,500 aggregate prescriptions of Sumavel DosePro have been dispensed and that monthly total prescriptions have increased in each month since launch. In June 2010, more than 3,000 total prescriptions were dispensed and nearly 24% of total prescriptions were classified as refill prescriptions.
Prescriber Base
Weekly prescribing data shows that more than 4,300 physicians have prescribed Sumavel DosePro. In each month since launch, the number of repeat prescribers for Sumavel DosePro has increased. In addition, 32% of Sumavel DosePro prescribers had not written a prescription for needle-based sumatriptan injection in the previous 12 months and an additional 35% of prescribers had written, on average, less than one prescription per month for needle-based sumatriptan injection.
Patient Dynamics.
Analysis of patient data indicates that approximately 37% of patients filling a Sumavel DosePro prescription were new to the triptan market (i.e., had not filled a triptan prescription in the prior 18 months), 34% had active prescriptions for Sumavel DosePro and at least one additional triptan and 17% of patients had converted to Sumavel DosePro from another triptan. The remaining 12% of patients were continuing users of Sumavel DosePro. Importantly, of the patients who converted from another triptan, 75% converted from oral triptans, including tablets and fast melt formulations. (Source® Lx APLD January 2010 – June 2010)
Patients’ Experience
Patients’ experience with Sumavel DosePro has been positive based on feedback provided via the Connects Program from Infomedics. This internet-based program invites patients that received a Sumavel DosePro prescription to register online at the time of their prescription and then provide feedback after they have used the product to treat a migraine episode. Through August 7, 2010, 877 patient respondents who had used Sumavel DosePro have rated their satisfaction with Sumavel DosePro at an average score of 7.1 versus 5.5 for their prior migraine medication (9-point satisfaction scale, with 9 being “very satisfied”)

USE OF PROCEEDS
$71mm
.  $35mm to fund Phase 3 clinical trials and related development activities for ZX002
. $35.4mm to fund the ongoing commercialization of Sumavel DosePro and for working capital and other general corporate purposes.

ZGNX Valuation Metrics

Nov 15wk IPO calendar

Anacor Pharmaceuticals (ANAC) $80mm IPO
with a market cap of $294 at the price range mid-point of $17
Scheduled for Thursday, November 18, 2010

ANAC Valuation Metrics

CONCLUSION
. Anacor is worth watching because of it’s top flight partners
. Collaborating with GSK & LLY
. Loss rate declining.  
. However, 75% of contract revenue from related parties

BUSINESS
Biopharmaceutical development company specializing in a boron chemistry platform

COLLABORATIONS
. GlaxoSmithKline (GSK) $100bb market cap
. Eli Lilly (LLY) $40bb market cap

USE OF PROCEEDS
$71.6mm plus $44.5 of cash on hand
. $46.7 million to fund Phase 3 clinical trials of AN2690 for onychomycosis and preclinical and clinical activities through the initial Phase 3 clinical trial of AN2728 for psoriasis; and
. $9.0 million to repay debt
. Remainder for R&D and working capital

ANAC Valuation Metrics