BioWorld International Correspondent
LONDON - Ark Therapeutics Group plc postponed its initial public offering on the London Stock Market, blaming "unusually adverse market conditions."
The move is a blow for the European biotechnology sector overall. Several other companies are ready to float and were pinning their hopes on Ark to reopen the IPO market, after 18 months without a biotech flotation.
Paul Higham, Ark's commercial director, told BioWorld International that the decision did not reflect any shortcoming with Ark, but was made because of the state of the market overall. "There was a serious shift down after [UK retailer] HMV's issue, and the Nasdaq biotech index is down 30 percent since we announced our intention to float on April 7."
During the road show in April, "the reception in terms of the company, its pipeline, strategy and management team was very good," he said.
The company was expecting to raise £30 million to £40 million, but pulled out last Thursday, just before the shares were due to be priced.
"We are still confident we can go ahead when the market gets back to normality," Higham said. "We put ourselves under the microscope on the road show; there's nothing we could have done differently."
Ark, based in London, has three areas of specialization: gene therapy, drug targeting and vascular diseases. It has six products in development and expects its lead product, EG006 for the treatment of cancer cachexia, to reach the market in 2004.
The postponement does not leave the company short of money as it raised £14.5 million in August, and currently has around £20 million (US$29.2 million) in cash. "We are well placed financially, so we just have to sit tight and hope things pick up soon," Higham said.