BioWorld International Correspondent

LONDON - Inion Group became the first Finnish company to have an initial public offering on the main market in London, grossing £33 million (US$62.5 million) to develop its bone-generating polymer, and underlining London's status as the only market in Europe that is receptive to small biotechnology companies.

Auvo Kaikkonen, CEO, told BioWorld International: "Since the company is based in Finland, Helsinki would have been the natural place [to IPO]. But we are not involved in mobile phones and there is no understanding of our technology, with no financial [public relations companies] and no analysts."

The company considered other markets in Europe and Nasdaq before choosing London. "We are not big enough for Nasdaq; Frankfurt is dead; Zurich was an alternative but we considered it is only open to Swiss companies," Kaikkonen said.

Inion listed at the higher end of its suggested valuation and received £3 million more than it set out to raise. The company sold 25.4 million shares at £1.30 per share, giving it a market capitalization of £90 million.

"Raising more than we set out to, and on the higher end of our [£1.13 to £1.36] price range was very pleasing," Kaikkonen said. The IPO attracted investors from across Europe.

The only other biotech to join the main market this year is Ark Therapeutics Group, of London, with a number of others, including VASTox, Synairgen, Vectura Group, Norwood and Evolutec, listing on AIM, London's junior market. But while London might be more receptive than elsewhere in Europe, it remains a very tight market, and Cyclacel and Microscience both were forced to pull proposed IPOs.

Before the IPO, Tampere-based Inion had raised €37 million (US$49.1 million) in three rounds since it was spun out of the Technical University of Tampere in 1999.

Inion had turnover of €2.4 million in the six months to June 2004 from sales of biodegradable implants. Kaikkonen said the company plans to use the money from the IPO to develop a novel bioactive polymer that is able to initiate bone growth.

The company has been collaborating with a group specializing in bone morphogenic proteins at the University of Zurich in Switzerland, but the bone promoter it has discovered is a small molecule, N-methyl pyrolidine (NMP).

"It was a lucky coincidence. We used NMP initially as a plasticizer in our biodegradable polymers. As we were doing safety testing, we saw the unexpected outcome of bone regrowth," Kaikkonen said.

As NMP is a solvent that is registered for intravenous use, Inion expects it will be straightforward to get approval for its material.

"We want to focus our resources on this to get a good market share in advance of other products that promote bone regrowth," Kaikkonen said.

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