BioWorld International Correspondent

Faced with poor market conditions, Swiss life sciences investment firm HBM Bioventures Ltd. decided to pull a planned IPO, but it is proceeding to list its shares on the Swiss Stock Exchange in Zurich. Trading is expected to commence tomorrow.

Baar, Switzerland-based HBM, which was established more than six years ago, had sought up to CHF150 million (US$136.2 million). Up to 1.55 million shares were to be offered. Investors were being offered 1.075 million new shares, along with 275,000 treasury shares. A further 200,000 shares were available to cover overallotments. The offering originally was due to be priced Monday, but the company decided not to proceed last week.

"Under current market conditions, it's not possible to go through an orderly book-building process and arrive at a reasonable transaction," HBM Bioventures Chief Financial Officer Joachim Rudolf told BioWorld International. Although investors exhibited a "reasonable interest" in the offering, HBM was not willing to sell shares at the kind of discount the market was seeking.

The fund, which is valued at around CHF1.046 billion, has no immediate need of cash, he said. "We have approximately 9 percent cash at the moment, plus we have several liquid public positions," Rudolf said.

HBM's investments are spread across public and private biotech, pharma, diagnostics and medical technology firms, as well as specialist venture capital funds. "Fifty-nine percent of the net assets are invested in private companies," he said. Emerging pharma and biotech constitute the single biggest sector allocation, accounting for around 64 percent of the total invested.

HBM already has a base of more than 1,400 investors, and its stock had been trading on an over-the-counter basis in Switzerland. Its valuation is conservative, Rudolf said, as several investees are undervalued, while the fund has reduced the valuations of underperforming assets.

UBS Investment Bank was the sole global co-ordinator and sole bookrunner for the IPO. Merrill Lynch International, Sal. Oppenheim & Cie AG, Bank Sarasin & Cie AG and Neue Zürcher Bank were co-lead managers.