12:00 AM
 | 
Oct 30, 2006
 |  BioCentury  |  Finance

Ebb & Flow

One of the signs of a maturing sector is when the fortunes of one company don't cause either panic or euphoria in the rest of the group. Two examples in Europe last week - one on the downside, one on the upside - reflect the growing sophistication of investors.

Paion (FSE:PA8) crumbled E2.36 (26%) to E6.79 last week after the company suspended a Phase III trial of desmoteplase for stroke because the trial's data monitoring committee wanted to review safety data.

While Paion's shares were off E3.29 (37%) to E5.71 on Wednesday after the news, neither the European group as a whole nor biotechs trading on the Frankfurt exchange suffered. On the day, the BioCentury Europe Index inched up 0.6%. No other biotech on the FSE moved up or down by more than 1%.

On the flip side, Friday's positive Phase III pain data from NicOx (Euronext:Nicox) also had no impact. The stock was up E0.80 to E13.60 on the day, for a gain of E1.20 (10%) for the week. French biotechs had mixed moves on Friday, including a 2% decline by BioAlliance (Euronext:

BIO) to E12.55; a 4% gain by Cerep (Euronext:Cerep) to E7.07; no move by ExonHit (Euronext:ALEHT), which ended the week at E4.72; and a 1% decline by Transgene (Euronext:Transgene), which closed at E9.10.

On the week, the BioCentury Europe Index, which tracks a basket of 19 continental stocks, tacked on a 2% gain.

As it turns out, the investment barometer should be tested again on Monday this week, as Paion on Saturday announced the DMC had recommended lifting the hold with no changes in the protocol (see "Stroke Frustrates Yet Again," A7).

Full steam ahead

Even without Saturday's turnaround, there were no hints Paion's news would affect the IPO market in Europe. Indeed, Genfit threw its hat into the ring, while Innate and Santhera could list this week.

"I'd characterize the markets as being open for business," said Deutsche Bank's John Goodey.

Indeed, scuttlebutt is that Innate's IPO is likely to be oversubscribed. The deal was expected to price on Tuesday and begin trading on Wednesday.

The immunology company is looking to sell up to 4.8 million shares at E4.15 -E4.80 on Euronext Paris, which would raise E19.9-E23 million ($25.1-$29.0 million). Earlier this month, Innate said that existing private investors Innoveris Group and Gilde Healthcare Partners had placed orders to purchase shares worth about E3 million ($3.8 million) and E2 million ($2.5 million), respectively.

Last Monday, Santhera said it is seeking to raise CHF83.6-CHF98.4 million ($66.4-$78.2 million) through the sale of up to 984,000 shares on the SWX Swiss Exchange. The neurology play hopes to achieve a post-money valuation of CHF250.9-CHF295.2 million ($199.3-$234.5 million).

Santhera's idebenone (SNT-MC17) is in Phase III testing for Friedreich's ataxia. Takeda (Tokyo:4502) has European rights to the membrane-associated antioxidant for the indication.

"Our feeling at the moment is that the Paion news is not affecting us," CEO Klaus Schollmeier told Ebb & Flow. "We have a full road show and we have not yet had one meeting where the Paion news became a topic."

Santhera is heading to the U.S. early this week to meet with investors who would participate in a parallel private offering. The book is expected to close on Nov. 2 and the first day of trading should be Nov. 3. Deutsche Bank is global coordinator and lead manager. Other underwriters include Piper Jaffray; WestLB; and Zurcher Kantonalbank.

Genfit-ness

Meanwhile, Genfit said its road show had been unperturbed by Paion's news. The French cardiovascular and metabolic specialist wants to list on Euronext's Alternext via a private placement with institutional investors of E15-E20 million ($18.9-$25.2 million).

"We expect the book to close at the end of November and the stock to...

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