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12:00 AM
 | 
Feb 16, 2009
 |  BioCentury  |  Finance

Ebb & Flow

Since the beginning of 4Q08, not a single biotech company has filed for an IPO. In that same time frame, eight companies pulled their deals, leaving at least five offerings pending.

There were no biotech follow-ons in 4Q08 as well, but that window now has been cracked, allowing three already well-heeled companies to close deals.

Last Friday, both Geron (NASDAQ:GERN) and InterMune (NASDAQ:ITMN) priced follow-ons, but aren't disclosing prices until the deals close on Feb. 19.

InterMune, which had about $185.6 million in cash and equivalents at the end of the third quarter last year, is selling 3.5 million shares in its deal. If sold at the stock's Thursday close of $17.96, the company would raise $62.9 million.

The deal provides the Street's vote of confidence behind data for InterMune's pirfenidone, which recently produced mixed data in two Phase III trials to treat idiopathic pulmonary fibrosis (IPF). With positive data from two Phase III studies, and an urgent unmet need, the company thinks it has enough for approval (see "Half CAPACITY," A10).

UBS was the underwriter. It also joined with Lazar to underwrite the Geron offering of 7.3 million shares. If sold at Geron's close of $7.77 on Thursday, the company would raise $56.3 million.

Geron, which had about $123 million in cash and equivalents at the end of 3Q08, has its GRNVAC1 telomerase vaccine in Phase II testing to treat acute myelogenous leukemia (AML).

At the end of January, Seattle Genetics (NASDAQ:SCGN) sold 5.7 million shares at $9.72 to raise $55.8 million.

The company, which had $160.7 million in cash at Dec. 31, this quarter is expected to start Phase II testing of its SGN-35 to treat anaplastic large cell lymphoma (ALCL) and a pivotal Phase II trial to treat Hodgkin's lymphoma. The antibody-drug conjugate (ADC) is composed of an anti-CD30 mAb and monomethyl auristatin E (MMAE).

Seattle Genetics is still above its follow-on price, closing last week at $10.36, up $0.01 on the week.

InterMune finished Friday down $0.48 to $17.48, and was up $0.35 on the week. Geron was off $1.39 (18%) to $6.38 on Friday, and was down $1.67 (21%) for the week.

War chest expansion

Bristol-Myers (NYSE:BMY) continued its reloading campaign by completing the spinout of its nutritional products subsidiary Mead Johnson (NYSE:MJN), which last Tuesday raised $720 million in an IPO through the sale of 30 million shares at $24. The deal was bumped up from a planned 25 million shares.

Mead Johnson noted about $680 million of the proceeds would be used to repay intercompany obligations.

BMS announced the IPO in September, telling investors its plan is to acquire new technologies, products and product platforms where the pharma can be competitive, while divesting or spending less where it won't have an advantage (see BioCentury, Sept. 15, 2008).

The new money would be on top...

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