BioCentury
ARTICLE | Finance

Ebb & Flow

November 6, 2006 8:00 AM UTC

When New Leaf (then Sprout), Venrock and Oxford BioScience first looked into Ribozyme Pharmaceuticals in late 2002, the eponymous biotech was on the ropes. It had a market cap of just over $5 million and had recently stopped developing its two most advanced clinical compounds. The VCs breathed new life into Ribozyme via a $48 million PIPE, which was sold at a reverse split-adjusted price of $1.98. The company was renamed Sirna (RNAI) and its new focus was RNAi therapeutics.

The VCs received their reward last Monday with the announcement that Merck would acquire RNAI for $13 per share in cash, or about $1.1 billion. With the takeout at a 100% premium to the trading price on the Friday before the deal was announced, the trio are looking at an 8X multiple on their investments...