Who else could follow Cumberland on to the stock market?
The successful flotation of Cumberland Pharmaceuticals this week (Cumberland cracks open IPO window, August 12, 2009) could prompt other companies who previously expressed a desire for life in the public eye to reconsider their plans.
As widely predicted, following such a drought of new public listings, it was a company with sales and profits that first tested the appetite of healthcare investors. EP Vantage has identified a handful of other candidates (see table below) with a similar profile who were gearing up for an IPO in the US, before the stock market crash of last year prompted a sudden rethink.
Of the 611 US-based private pharma and biotech companies within the EvaluatePharma universe, 45 companies already have one or more products on the market. Of these, just four companies have indicated a desire for a public listing, by filing an S1 form with the SEC.
|Private companies with marketed products and previous IPO track record|
|Company||Marketed products||Pipeline products||Initial S1 date||Most recent S1 date||Pulled or ongoing?||Company Established||Comment|
|Talecris Biotherapeutics||12||4||Jul-07||Jul-09||ongoing||Apr - 2005||JUL 2007: Filed for IPO.
1 APR 2005: Established by Cerberus Capital Management & Ampersand Ventures (private investment firms), upon the acquistion of Bayer's plasma products business.
|Xanodyne Pharmaceuticals||10||4||Sep-07||Oct-08||Pulled||Jun - 2001||17 JUN 2001: Established as UBE Pharmaceuticals. SEPT 07 Submitted S1 to raise money to fund launches and clinical trials. OCT 08 Pulled due to market conditions.|
|CyDex||3||10||Mar-08||Oct-08||Pulled||Dec - 1993||MAR 08 submitted S1 seeking to raise $50m to fund R&D and building infrastructure. OCT 08 pulled due to market conditions|
|ZARS Pharma||2||5||Jun-07||Oct-08||Pulled||Nov - 1996||JUN 07 filed S1 seeking to raise $86m to fund R&D and potential acquisitions. OCT 08 pulled due to market conditions.|
Like Cumberland, Xanodyne, CyDex, ZARS all have marketed products, and were hoping to raise public money to accelerate expansion. All cited the sudden deterioration in market conditions for their decisions to cancel their plans.
Although Cumberland achieved a share price at the low end of the range that the stock was being pitched at, the price was actually higher than the company was hoping to achieve two years ago. Assuming these three companies have also spent the last year or so making progress with their pipelines, they might also be tempted to retest the waters.
Talecris is a slightly different case, being on this list due to the failure of a takeover bid from CSL, which put its plans to float on hold. Demands from anti-trust regulators prompted the Australian company to walk away earlier this year.
However, the blood plasma group’s private equity owners will still be itching for exit, and considering that its S1 documents appear to have been kept up to date, this could still occur.
Clearly, if these “safer” companies could not achieve a listing over the last year, their higher risk cousins, those at the pure end of drug research, had little chance. It is still highly debatable whether the equity market’s have regained their appetites for these sorts of companies.
Whilst a few, like Bayhill Therapeutics, threw in the towel, a few have kept their toes in the water. Both Prometheus Laboratories and Omeros have kept up to date with their SEC filings. The former has had its eye on the market since December 2007 and has said it wants to raise $100m to fund in-licensing and acquisition opportunities.
Omeros only filed its first S1 with the SEC in January, suggesting the firm is very serious about its public plans. The group wants to raise $115m to fund R&D and the commercialisation of its phase III product, OMS103HP, an NSAID developed to control pain following arthroscopy surgeries, which it hopes to file with the FDA next year.