Staff Writer

Alimera Sciences Inc. filed to raise up to $75 million in an initial public offering, becoming only the eighth biotech this year to join the IPO queue.

The Alpharetta, Ga.-based company plans to list on Nasdaq under the ticker "ALIM." Underwriters for the deal include Credit Suisse Securities LLC, Citigroup, Cowen and Co. LLC, and Leerink Swann LLC.

Alimera's proposal follows filings from Aldagen Inc., BioTrove Inc., Zogenix Inc., CyDex Pharmaceuticals Inc., Phenomix Corp., Bayhill Therapeutics Inc. and Omeros Corp. Bayhill withdrew its filing last week due to market conditions, which are unfavorable, to say the least.

While 27 biotechs priced IPOs in the first half of last year, only four have managed the feat this year.

Two - BHK Inc. and MolMed SpA - listed on foreign exchanges. One - RXi Pharmaceuticals Corp. - was a spinout and listed for liquidity rather than fundraising. And one - Bioheart Inc. - pulled in a paltry $5.8 million. (See BioWorld Today, Feb. 21, 2008, and March 13, 2008.)

Performance in the broader markets has been similarly depressed.

Only five venture-backed companies went public in the first quarter, and none went out in the second quarter, marking the worst slump since 1978.

Tuesday, the National Venture Capital Association (NVCA) called the situation a "capital markets' crisis for the start-up community."

NVCA President Mark Heesen said he views the dearth of IPOs in the second quarter as "the canary in the coal mine," noting that now-public venture-backed companies provide 10.3 million jobs and account for 18 percent of the U.S. Gross Domestic Product, according to a 2007 Global Insight Report.

For the biotech industry, Canaan Partners general partner Wende Hutton said the situation is not so much a crisis as a dry liquidity period. "We're not talking about a macro shift in the fundamental demand for health care - I think you'd be hard pressed to say there is not a wealth of opportunity ahead," she said.

And although the IPO window is temporarily shut, biotechs still have the merger and acquisition option. Hutton predicted that pharma appetite will ensure companies with strong Phase II programs will continue to "find a home."

An NVCA survey showed that venture capitalists attribute the IPO drought to skittish investors, the current credit crunch and mortgage crisis, and expensive Sarbanes Oxley regulations.

Eighty-one percent of VCs surveyed said they do not expect the IPO window to open in 2008.

Cracking the window open again likely would require a new generation of mature companies with exciting technology, Hutton said.

If Alimera does manage to complete its IPO, the company plans to use proceeds to finish up two ongoing Phase III clinical trials of Iluvien for diabetic macular edema (DME). Enrollment in the two trials is complete, and Alimera plans to submit a new drug application in the first quarter of 2010.

Iluvien is an intravitreal insert for drug delivery into the back of the eye. Alimera exclusively licensed the technology from Boston-based pSivida Corp., which will receive a portion of the IPO proceeds.

For the treatment of DME, Iluvien delivers the nonproprietary corticosteroid fluocinolone acetonide.

The approach also may be applicable in treating ophthalmic diseases such as both wet and dry age-related macular degeneration (AMD) and retinal vein occlusion. Additionally, Alimera has an option to license two classes of Nicotinamide Adenine Dinucleotide Phosphate oxidase inhibitors from Emory University in Atlanta for dry AMD and other ocular diseases.

Clinical trials with those programs also would be supported by proceeds from the IPO.