Valuing Verastem

Three companies in the IPO queue have set their price ranges this month, providing valuation benchmarks for other biotechs looking to go public in 2012. The real question is whether Verastem Inc. is an outlier or the new norm - the preclinical cancer stem cell company is seeking a valuation of almost $200 million.

The last preclinical play to go public in the U.S. was in 2007 when NovaBay Pharmaceuticals Inc. (NYSE-A:NBY) raised $20 million in a deal that valued the infectious disease company at $84.6 million...