Celon Pharma Gains 19% in First Day of Warsaw Trading

  • Biggest IPO in Warsaw this year raised $62.3 million
  • Buyers seek diversification from pharma sales outside Poland

Celon Pharma SA shares jumped 19 percent in the first day of trading on the Warsaw Stock Exchange after the Polish drug maker completed its initial public offering.

The Warsaw-based company was trading at 19.59 zloty at 10:19 a.m. local time, valuing Celon at $224 million. The company last month raised $62.3 million, the biggest IPO in central and eastern Europe this year after Moneta Money Bank AS’s offering in the Czech Republic.

Celon, established and controlled by Maciej Wieczorek, plans to use the cash to expand its R&D center and widen testing of new anti-depressant and cancer drugs as it seeks to compete with global pharmaceutical companies such as GlaxoSmithKline PLC.

“Biotechnology companies are an interesting diversification as their potential depends on a global sales perspective, not only on local conditions,” said Jaroslaw Niedzielewski, chief investment officer at Investors TFI SA, a mutual fund in Warsaw. “The recent global retreat from the industry hasn’t stopped purchases of such shares in Poland.”

Celon joins a wave of Polish biotech and pharmaceutical companies which have outperformed the benchmark WIG20 Index in 2016 as sales of licensed and generic drugs to foreign markets boost revenue. Shares in Mabion SA, a firm also owned by Wieczorek that develops cancer-fighting drugs, have gained 64 percent this year, while the stock of Selvita SA has advanced 21 percent.

Poland’s WIG20 index, which lists the biggest and most-liquid shares, has retreated 7 percent during the same period, as new taxes and changing government policy for utilities and banks weigh on sentiment. Celon is one of the few bright spots for equity offerings in Warsaw, the largest of the three central European bourses. IPO proceeds have declined this year to the lowest since at least 2005 amid a lack of privatizations.

“We want to expand abroad and be part of the race for the global pharmaceutical market,” Chief Executive Officer Wieczorek said in an e-mail. “Money raised in the IPO allows us to effectively develop several innovative products and their future commercialization.”

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