BioWorld International Correspondent

Pricing its initial public offering at CHF90 per share, toward the lower end of its indicative price range of CHF85 to CHF100, Santhera Pharmaceuticals AG took in CHF88.5 million (US$70.5 million) before expenses in its debut on the Swiss Stock Exchange last week.

The Liestal, Switzerland-based company's issue of 983,859 new shares - one-third of its total equity - was fully taken up by investors. The stock opened at CHF90.20 on its first day of trading Friday and ended the day marginally higher, at CHF90.75.

Santhera now has about 2.9 million shares outstanding. An additional 147,579 shares are available to cover overallotments. If the underwriters exercise that option, it would add another CHF13.3 million to the total proceeds.

The company looks to have timed the transaction to perfection, as publicly quoted Swiss biotechnology firms are enjoying a bull run at present. "Most of them are really successful and are doing great," Tilman Dumrese, analyst at Zurich-based Bank Sal. Oppenheim Jr. & Cie, told BioWorld International.

Basilea Pharmaceutica AG and Speedel Holding Ltd., both of Basel, and Schlieren-based Cytos Biotechnology AG are trading at or close to all-time highs, while Allschwil-based Actelion Ltd. is at a five-year high. Although Swiss investors have exacting requirements for companies seeking to go public, those that can clear those hurdles are, Dumrese said, rewarded by a market with a high level of expertise. "It's a very attractive market for young companies to go public."

Santhera's main priority is to complete a pivotal Phase III trial of its lead compound, idebenone, in its lead indication, the inherited neuromuscular degenerative condition Friedreich's ataxia (FRDA), and to obtain registration for the product in the U.S. and in Europe. "The follow-on priority is then to get ready in the U.S. to launch the product ourselves," Santhera CEO Klaus Schollmeier told BioWorld International.

M.J. Roach, whom the company recently appointed as vice president of sales and marketing, will lead this effort. Roach, formerly of Cambridge, Mass.-based Biogen Idec Inc., is based at Santhera's headquarters but will transfer to a not-yet disclosed location on the U.S. East Coast to execute the prelaunch and launch plans. Takeda Pharmaceutical Co. Ltd., of Osaka, Japan, holds European rights to the product in FRDA.

The IPO was the second largest in Europe so far this year, eclipsed only by that of Manchester, UK-based Renovo Group plc, which raised £50 million (US$87 million) in April. (See BioWorld International, April 12, 2006.)

Frankfurt-based Deutsche Bank AG acted as global coordinator and lead manager for the offering. Minneapolis-based Piper Jaffray Inc., Dusseldorf, Germany-based WestLB AG and Zurich, Switzerland-based Zurcher Kantonalbank AG also participated in the syndicate.

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