Restarting the IPO engine
The industry priced $540.6 million of IPO paper last week, helped by the rebound in the sector and solid earnings from the big cap companies. While last month's proclamation of the mapping of the human genome may have helped, banker George Millstein of Pacific Growth Equities said, "the strong IPO market is related to the overall performance of the industry. A lot of stocks have rebounded from their lows, IPOs and follow-ons are performing very well and all of those contribute to a renewed interest in IPOs."
The performance is reflected in the BioCentury 100 index, which is up 63 percent to 3204.89 since its 2000 low of 1970.83 on April 17.
Stuart Duty of U.S. Bancorp Piper Jaffray also believes that while news of the map is helping some IPOs get out, solid earnings from the bellwethers and a continued influx of money into stock funds are driving IPOs. "I hesitate to say the map's the driving force," he said. "Cash flow into equity funds continues to be strong, and we're seeing good earnings from both tech and biotech, which is making investors feel comfortable about their positions" (see Ebb & Flow Focus, A15).
Whether or not the map is having a springboard effect, genomics-related companies and toolkit plays were hot last week, taking $461.9 million of the IPO pie.
The pace-setter was Icelandic genetic information play deCode Genetics (DCGN), which raised $198.7 million (including the greenshoe) in a dual listing on EASDAQ and NASDAQ. DCGN had bumped up