Ebb & Flow

Stocks generally fall to account for dilution when companies propose follow-ons. But shares of Transgene (Euro-next:Transgene) rose both before and after the company's offering last week. Generalist investors from across the continent with little exposure to small and mid-cap stocks are behind the pop.

Two weeks ago, when the company said it planned to raise E75.7 million ($101.3 million) through the sale of 4.1 million shares at E18.25, the stock rose E2.23 to E19.98. Last week, the company raised E87 million ($116.4 million) through the sale of 4.8 million shares (including the overallotment), and the stock rose again, finishing the week up E0.31 to E20.29.

Transgene's TG4001 vaccine has completed Phase II testing in stage 2/3 cervical intraepithelial neoplasia (CIN2/3). The vaccinia virus vector encoding HPV E6 and E7 antigens and an IL-2 coding sequence is expected to enter Phase III trials by 1H08. It is partnered with Roche (SWX:ROG).

Much of the enthusiasm was driven by the hope that Transgene can repeat the growth in shareholder value since the last fundraising in 2005, when the company raised E34.9 million through the sale of 4.7 million shares at E7.50.

"Investors made three times their money and are hoping for a repeat," said Olivier Garnier, co-founder and managing director of Bryan Garnier, the lead manager and sole bookrunner on the transaction. "Philippe Archinard, Trans-gene's CEO, told the market that he would always need to raise more money and we were able to do that at a decent price."

With orders for at least E160 million, split equally between French and international institutions, Garnier told Ebb & Flow that he was able to price the offering aggressively.

Also, in order to ensure a broad international shareholder base, Bryan Garnier skewed the allocations away from French investors. British and French institutions were allocated 30% each, Swiss and Scandinavian investors got 15% each, Benelux institutions picked up 7%, and the remaining 3% went to German investors. Nomura Code Securities was co-manager.

IPOs international

Gene therapy company Amsterdam Molecular(Euronext:AMT) raised E50 million ($66.9 million) in an IPO and private placement last week. The price

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