Glycomed Inc. and Genelabs Technologies Inc. are the latestbiotechnology companies that have had to lower the prices oftheir initial public offerings.
Glycomed on Thursday said it completed its offering of 2.3million shares priced at $7. The Alameda, Calif.-baseddeveloper of drugs based on complex carbohydrates hadoriginally proposed an offering price of between $12 and $14.
Genelabs of Redwood City, Calif., on Thursday said it priced itsoffering at $9.13 and reduced the number of shares sold by200,000, to 2.8 million. The proposed price for the shares hadbeen $10.50 to $13. The company is developing products todiagnose and treat viral diseases and cancer.
Glycomed's price slashing was the steepest of the fivecompanies that reduced their offering prices since mid-May.
Of the other three, Isis Pharmaceuticals Inc. dropped its priceto $10 from a proposed $13 to $15; ImmuLogic PharmaceuticalCorp. completed its offering at $10, down from $14 to $16; andCambridge NeuroScience Inc. sold at $12, down from $15 to$17. Isis and ImmuLogic also reduced the number of sharesoffered.
The latest IPOs reconfirmed what analysts have been sayingfor the past several weeks. "Right now the market is beingtough on IPOs on companies in the early stages of productdevelopment," said biotech analyst David Webber of Alex.Brown & Sons in New York. Webber emphasized that the IPOwindow remains open. "But for early-stage companies, it'stougher."
Two companies that bucked the trend were Icos Corp. andSciGenics Inc., which both completed offerings at the low endof their proposed price ranges. SciGenics has a product,macrophage colony stimulating factor, already in clinicaltrials.
Icos,which is developing drugs to treat inflammatory diseases,succeeded because 85 percent of the offering went to retailinstead of institutional investors, said Joseph Edelman, ananalyst at Prudential Bache in New York.
"Typically, 60 percent of a biotech deal goes to institutions,where they're sophisticated investors," said Edelman.
Glycomed stock (NASDAQ:GLYC) closed unchanged Thursday at$7.13. Genelabs (NASDAQ:GNLB) closed unchanged at $9.13. --Karen Bernstein
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