Associate

Aderis Pharmaceuticals Inc. on Tuesday postponed its initial public offering. Although having set its number of shares at 6.5 million and offered a price range of $9 to $13, the company was not satisfied by present market conditions.

A slew of companies with IPOs pending surely took in that bit of news and found it unpleasant - perhaps the perceived IPO opportunity in the current investment environment doesn't exist.

It's there, said Andrew Weisenfeld, managing director of biotech investment banking at Banc of America Securities, but it's a Darwinian opportunity.

"My thoughts are that the community, broadly speaking, definitely stratified the universe of possible [IPO] candidates," he told BioWorld Today. "Some of the early candidates weren't among the strongest - there are stronger ones to come. The early stage, or less-mainstream [companies], are questionable when regarding how well they'll do."

This is not Hopkinton, Mass.-based Aderis' first attempt at becoming a public entity - it filed in January 2002, as well, eventually pulling that IPO the following August, only to refile in August of this year, setting its range and number of shares earlier this month. The company could not be reached for comment.

Aderis' pipeline sports four products in development for five indications, the furthest along being Rotigotine-CDS, a dopamine D2 receptor agonist transdermal patch for first-line treatment of early stage and combination therapy for late-stage Parkinson's disease. It is in Phase III trials. The product also has been formulated as a reduced-dose patch for the treatment of restless legs syndrome. Partner Schwarz Pharma AG, of Monheim, Germany, began a Rotigotine-CDS reduced-dose pilot Phase II trial in late 2001 in Europe.

Below that, it has MRE-470 in Phase II work as an alternative to exercise stress testing in combination with coronary artery flow imaging for the diagnosis of coronary artery disease.

Aderis also has DTI-0009, which is designed to control heart rate in atrial fibrillation by slowing conduction through the atrioventricular node. The product is being developed as both an oral formulation for chronic therapy and an intravenous formulation for acute therapy. The IV formulation is in Phase II trials.

So, it has what most investors seem to want, which is a real possibility for revenue through product sales in the not-too-distant future.

"I think people are looking for later-stage, near-term tangible opportunities," Weisenfeld said. "They're looking for companies with identifiable market positions and with possible near-term clinical success and product approvals."

A few companies have come through. Acusphere Inc., of Watertown, Mass., went public earlier this month, raising $52.5 million. Germantown, Md.-based Advancis Pharmaceutical Corp. raised $60 million by selling 6 million shares at $10 apiece in its IPO this month. For Acusphere, the company's lead product is an ultrasound-imaging agent, so while that agent is regulated as a drug by the FDA, the company's transition to a public entity was not seen as a true biotech barometer of what might follow. Advancis is considered to be a specialty pharmaceutical company. And neither has fared particularly well on the other side - Acusphere priced at $14 and on Wednesday its shares (NASDAQ:ACUS) rose 5 cents to close at $9.85. Advancis priced at $10 and its stock (NASDAQ:AVNC) fell 34 cents Wednesday to close at $8.66. Weisenfeld isn't intimate with either company, but he said their post-IPO performances might scare off others. (See BioWorld Today, Oct. 9, 2003, and Oct. 20, 2003.)

"I don't know them personally, but if you look at how they've traded, they haven't done that well," he said. "The investors can't be thrilled, given how they have traded, so those investors might be less inclined to take a risk in future deals."

Industry observers and investors are waiting to see how a true biotech company fares publicly - once one gets through. Some believe that Myogen Inc., of Denver, could provide a good measuring stick. Its portfolio includes an intravenous formulation of enoximone, called Perfan IV, which is marketed in Europe for acute decompensated heart failure. The company received rights to the IV formulation and the capsule form, which is in a Phase III program, from Hoechst Marion Roussel AG, now Aventis SA, in 1998. It also is developing three candidates in different cardiovascular indications.

On Wednesday, Myogen's pricing was believed to be imminent. The company has set its share number at 5 million and its range at $14 to $16 per share. CancerVax Corp., of Carlsbad, Calif., seeking between $72 million and $84 million, and Genitope Corp., of Redwood City, Calif., seeking between $41.4 million and $59.8 million, also are expected to price in the Oct. 29-30 time frame.

What the sector needs, Weisenfeld said, is a biotech company on solid ground to get its IPO through - what he called "a stabilizing deal" - which would allow investors to "gain some footing."

"I'm confident that there will be a market for high-quality companies, but it's not going to be like it was [before]," he said. "It's going to be - the word I use is 'discerning.' The bar is set higher now."

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