Michelle SladeAssociate Editor

Poor market conditions may have contributed to the weakstock performance of some of the biotech companiescompleting initial public offerings this year, but some of thecompanies themselves may be at least partially to blame.

Analyst Gregory Brown of Vector Securities in Deerfield, Ill.,said that many of the companies filing IPOs this year"prematurely jumped through the open window."

"For example, Telios (Pharmaceuticals Inc.) has interestingscience, but its not well differentiated and understandableyet," he said.

In contrast, Brown described Theratech Inc. of Salt Lake Cityas having a "very solid science," with a differentiatedtechnology in an area where companies are trading at apremium.

Commenting on the performance of companies that completedIPOs this year, Don Hawthorne, chief financial officer ofBiocircuit Corp., said "external market factors" were a drivingforce behind the fact that the majority are now trading wellbelow their IPO price.

Biocircuits of Burlingame, Calif., is one of the few members ofthe Class of '92 that has managed to trade fairly steadilyaround its IPO price in May, when it met its $10 million target."We were priced later in the market cycle, when expectationswere different," Hawthorne said.

Philip Vanderwerf, president and chief executive officer ofSciClone Pharmaceuticals Inc. of San Mateo, Calif., said thecompany was fortunate to beat the close of the IPO window,raising $21 million. Vanderwerf cited the company's low burnrate as one of the reasons SciClone has been able to not onlymaintain but increase its stock price.

Despite good intentions, other companies have seen their stockprice tumble since their offerings.

Although Sphinx Pharmaceuticals Inc. of Durham, N.C., said ithas done everything it said it would do to keep itsshareholders happy, the company's stock has lost 55 percent ofits value since it launched its IPO.

"We have achieved all our internal and external goals so I can'ttell you why we're down -- we feel we've done our part," saidBennett Love, the company's director of business development.

(c) 1997 American Health Consultants. All rights reserved.

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