Ebb & Flow

While VCs continue to pour money into no research-development only companies, drug reprofilers and other fast track business models, at least one NRDO got some push-back from the public markets. After competing its road show and with its IPO scheduled to price last week, in-licensor Peninsula put its deal on ice after finding that portfolio managers wanted a beefier pipeline.

Outside of doripenem, a broad spectrum carbapenem antibiotic that it got from Shionogi, Peninsula does not have any other compounds in the clinic. It is conducting a Phase III trial of doripenem to treat complicated urinary tract infection (UTI), and it plans to begin two Phase III studies in the first half of the year in complicated intra-abdominal infections and hospital-acquired pneumonia.

An inhaled version of doripenem is in a Phase I trial for cystic fibrosis. Next in line is PPI 0903, a broad spectrum cephalosporin antibiotic for hospital-based infections. Peninsula hopes to begin Phase I testing this year.

Peninsula wasn't looking for a knock-your-socks-off valuation. The company was hoping to go out at $299 million, which is $27 million below the $326 million average post-money valuation of the 12 deals that have gotten out so far this window.

The company was looking to raise $69-$80.5 million through the sale of 5.75 million shares at $12-$14. CS First Boston was the sole bookrunner, and the syndicate included Piper Jaffray; Citigroup; and First Albany.

Peninsula has some runway, thanks to a $58 million series C round in December. As of year end the company had $63.1 million in cash, and it posted an annual operating loss of $17.4 million.

On top of Peninsula's news, two companies filed for IPOs and two IPO candidates updated their offerings. The U.S. IPO queue now stands at 17 companies (see "The New Queue," A16).

New entrants

Two other companies that bear fast track features entered the queue. But unlike Peninsula, each is on the cusp of submitting products for FDA

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