Ebb & Flow

European investors signaled last week that they will take as hard a line on European IPOs as investors have been taking in the U.S. And given its cash position, the company that tested the waters, Immuno-Designed Molecules, chose to just say no.

IDM, which announced its planned IPO on June 2, last week postponed its offering on Euronext in Paris, citing market conditions. The French cancer company had been looking to raise up to E99 million ($119 million) through the sale of 8.1 million shares at E10.50-E12.20. That would have given it a market cap of about E320 million ($385 million).

IDM was aiming high. Only two other companies have raised more in this window: ophthalmic and drug delivery company Eyetech (EYET) raised $157 million, and infectious diseases play Basilea (SWX: BSLN) raised $162 million. In Europe, IDM's valuation would have ranked it 14th after infectious, dermatology and diagnostic company Innogenetics (Euronext:

INNX).

IDM's Mepact macrophage activator to treat pediatric osteo-sarcoma has completed Phase III trials and has Orphan Drug designation in the U.S.

CEO Jean-Loup Romet-Lemonne argued that the problem was not price but the markets. "When the market isn't there, it's always too expensive," he said. "It wasn't a question of price. I think it would have been exactly the same situation had we tried to go out on NASDAQ or on Switzerland's SWX market."

IDM began its road show in early June, just before the American Society of Clinical Oncology meeting in New Orleans. The company was hoping for the traditional post-ASCO bounce, "but it didn't happen this time," said Romet-Lemonne. "Even worse, a drop of about 5% on the NASDAQ biotech index was seen in the three days after the meeting."

IDM could have followed other U.S. IPOs and reduced its price range, but instead chose to walk away. The company had about E30 million ($36.6 million) in cash at March 31.

"When we set the price, we took into consideration the level of maturity of the company and the valuations of comparable companies

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