BioWorld International Correspondent

In keeping with its habit of doing things differently, Speedel Holding AG gained a stock market presence without raising any cash, simply by listing all of its issued shares Thursday on the Swiss Stock Exchange in Zurich.

By the end of the first day's trading, its shares rose from the opening price of CHF125 to close at CHF140, conferring a market capitalization of CHF949.6 million (US$753.1 million) on the Basel, Switzerland-based company.

About 215,000 shares changed hands during the first day of trading, representing just less than 3.2 percent of the company's equity. All of its outstanding nearly 6.8 million shares can theoretically be traded at any time, although its key shareholders remain committed to the stock.

"They are not exiting," Speedel's director of communication and investor relations, Nick Miles, told BioWorld International. Another about 1.5 million shares have been registered, primarily to cover convertible debt facilities and employee share options.

The company, established in 1998, pulled a more conventional initial public offering in May. It then raised CHF70 million through a convertible loan in early August, having taken in CHF47.8 million in equity financing in February.

"We actually felt that the IPO process is not optimal for many young companies," Miles said. "You're asking the market not only to put the valuation on you but also to give you a considerable amount of money at the same time, when they don't have experience of you as a public company."

Speedel has pursued a distinctive business and financing model. The company gained an early revenue stream by in-licensing a number of compounds from large pharmaceutical companies and bringing them through preclinical and early clinical development before licensing them back out. It subsequently built up an in-house discovery function and broadened its pipeline. It has eschewed the conventional venture capital financing route, preferring to develop long-term relationships with committed investors and to raise additional cash through debt.

At the time of its listing, private investors held 43 percent of its equity, while the venture capital arms of two pharmaceutical companies, Basel-based Novartis AG and DSM, of Heerlen, the Netherlands, held a combined 12 percent. The balance was held by the company's founders, directors and management. With CHF122 million in cash and equivalents at mid-August, the company is financed through the first quarter of 2007.

"There are very straightforward, strategic reasons to becoming a listed company," Miles said. "One is to get visibility and credit for a pipeline, which we wouldn't get as a private company." Positive news flow can have a more immediate and transparent effect on a quoted company's valuation, he said, in contrast with that of a private company. "We feel we deserve to be on the same playing field as certain companies in the United States and in Europe," Miles said.

The listing comes just ahead of a Novartis R&D day, to be held Tuesday in London, at which the pharmaceutical company will unveil data on Speedel's lead product, Aliskiren, a first-in-class oral renin inhibitor, which is undergoing a Phase III trial as a monotherapy in hypertension and a Phase II trial in combination with the angiotensin receptor blocker Diovan (valsartan). Speedel hopes that revenues will start to flow from that product in 2007. A recent Deutsche Bank report forecast $1.1 billion in sales of the product in 2010. Speedel itself moved SPP301, an endothelin receptor antagonist, into a pivotal Phase III trial in diabetic nephropathy in July. (See BioWorld International, July 13, 2005.)

No Comments