BioWorld International Correspondent

MolMed SpA restored a measure of confidence to European biotechnology by netting €50.1 million (US$76 million) in the sector's first IPO of this year. Shares will begin trading today on the Mercato Telematico Azionario, the electronic share-trading platform administered by Milan, Italy-based Borsa Italiana SpA.

That the IPO came in at the bottom of its estimated price range is less significant than the fact that it happened at all, given the nervous state of the public markets at present and the depressed valuations of nearly all of Europe's listed biotechnology companies. The company, which is based in the San Raffaele Science Park in Milan, was able to place 26,116,952 shares with investors, the full allocation of stock on offer.

Pricing was not necessarily a function of demand in any case. It had guided an indicative share price range of €2.15 to €2.75 at the outset of the bookbuilding period, but CEO Claudio Bordignon told BioWorld International that the company set the offer price at €2.15 on the direction of its advisers, in order to favor the retail segment of its investors, in particular. Its post-money valuation prior to the start of share trading was €224.6 million.

The company will use the proceeds to advance its pipeline of cell and biologic therapies. Its lead programs include the TK haematopoietic stem cell transplant procedure, which is in a Phase III clinical trial in acute myeloid leukemia patients, and Arenegyr, a fusion protein that targets tumor necrosis factor alpha to newly formed tumor vasculature tissue, which is in Phase II and Phase I clinical trials in multiple cancer indications.

It may build a TK facility in the U.S., Bordignon said, although it has not finalized that decision. It does plan to commercialize the therapy itself, as it only requires a small specialist sales force, which can be put in place around six months ahead of market launch. It aims to find a partner for Arenegyr, but it wants to build value in the program by examining its efficacy in as many solid tumor indications as possible. "Clearly we have to find the right timing for this kind of partnership," Bordignon said.

The company will publish clinical data on Arenegyr at this year's American Society of Clinical Oncology meeting, which will be held in Chicago May 30 through June 3.

It will release interim data from the Phase III study of TK at the American Society of Hematology meeting, which will be held in San Francisco in December.

As well as providing something of a morale boost for European biotechnology in general, MolMed's IPO also will increase the visibility of the wider Italian biotechnology scene. "It's clearly growing in a significant way," Bordignon said.

"The biomedical research is excellent, and it's relatively cheap," he said. Wages can be as much as 50 percent lower than those in northern European locations. "It has a cost-benefit ratio that's particularly favorable."