Ebb & Flow

After rushing to the SEC to file S-1s, bankers are taking a wait-and-see approach before actually marketing biotech IPOs. That's because no one wants to be the first to test the waters. A weak response could have a chilling effect on other deals, and no banker wants to have a deal get pared down, fail to trade up in the aftermarket, or - even worse - get pulled.

The good news is nobody really sees the latter happening, because this rally has all the right ingredients for an IPO window. "Number one, you have momentum, and number two, you have outside money coming into the sector," said David MacCallum, a long-time biotech banker who now runs a hedge fund called Outer Islands Capital. "It's coming from specialist funds and it's coming from broad-based funds. You can't build a window on the stamp collectors or esoteric investors like myself."

Even though 12 companies are in the queue, "nobody's kicked off a road show," noted Peter Crowley of CIBC, which is on the covers of cardiovascular play Myogen and neurological in-licensor Xcel.

Still, the industry could see its first IPO in mid- to late- October. MacCallum suggested at least "a few" will get out this year, and he believes they'll trade up and throw the window open early next year.

Last week, CancerVax updated its IPO, so that four companies now have filled in the key financial details necessary before setting off on the road(see "Outlier").

Behind the scenes, the pitch fest continues, so even if the first few get out, no one expects a depletion of the queue. "I can't leave a company and walk across the street without running into another banking team," said one biotech banker who didn't want his name used.

Après le deluge

Now that Hurricane Isabel has abated, look for Pain Therapeutics (PTIE) to price its follow-on early this week. On Friday, the company said it was unable to price the deal - originally expected post-market on Thursday - because SEC offices were closed

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