Stuffy in here, Part II

Sarah Lacy

More and more chatter about biotech IPOs this week, and a few more data points. In my reporting last week for this blog and this story, industry watchers (particularly bankers and VCs) pooh-poohed concerns about last week's biotech issues having to slash their prices in half to get out. It's merely a sign that investors want a cheap deal, not that they aren't interested in new issues, they said. What will the real red flag be? Companies postponing.

Enter Peninsula Pharmaceutical. It announced today that it's postponing its IPO, planned for this week.

The plan called for 5.75 million shares at $12-$14 a share-- a price no one has been able to get so far this year. No word yet on the thinking at AlgoRx Pharmaceuticals, another one that was supposed to price this week in the $10-$12 per share range. Also no word out of CardioVascular BioTherapeutics which was supposed to go out last week.

CardioVascular BioTherapeutics doesn't have a late-stage product and that might be part of the problem. My sources don't seem to know much about them. But the other two seem to be decent candidates—at least according to bankers' descriptions of what investors want. Neither have revenues, as is the usual case with biotech IPOs, but both have a product in phase III clinical trials. The common wisdom has been to go public you need mid-phase II or later. And neither is in the over-funded cancer drug arena. Peninsula Pharma has an antibiotic for terminal illnesses in phase III trials for five indications, and AlgoRX is developing drugs for pain management, with a drug in phase II and phase III, according to the companies' Web sites.

It's still not much of a sample size, I know, but you can bet the dozen companies that have filed to go public and dozen more that I hear are planning to file this month are watching closely. For the thoughts of the always-bullish Steve Burrill go here.

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