LA JOLLA, Calif. -- Public offerings launched during the firstquarter of 1991 could raise biotechnology companies almosthalf as much money as they raised in the public market overthe past eight years.

Biotech companies raised $2.6 billion through secondary andinitial public offerings from March 1983 through 1990,according to Stelios Papadopoulos, managing director atPaineWebber Inc. Offerings filed or completed through March31 could raise $1.2 billion.

The only period resembling the present window is 1986, whencompanies raised $880 million in 34 transactions, Papadopoulossaid last week at the PaineWebber-Bio/TechnologyBiopharmaceuticals Conference here.

Nor is there any end in sight. Windows last six to nine monthson average, said Papadopoulos. The present window, whichopened at the beginning of February, is only 2 months old.

The available pool of capital is enormous, as lower interestrates and the decreased attractiveness of junk bonds have leftinvestors looking for a place to put their money, said BrookByers, general partner at Kleiner Perkins Caufield & Byers.

Demand for biotech stocks is also more broad-based than in thepast. Now that biotech companies have products on the market,a wider class of less risk-prone buyers is buying up offerings,said Papadopoulos. Large institutional investors such aspension funds are also adding biotech stocks to their emerginggrowth fund portfolios, said Parag Saxena, managing director atChancellor Capital Management.

Industry-watchers at the conference sounded a note of cautionon the pricing of initial public offerings. Today's moresophisticated investors are well aware that almost allcompanies' stocks have fallen below their IPO prices, saidSaxena.

IPOs for companies with no clinical data that result in marketvaluations much more than $100 million are bad for everyone,said Byers.

-- Karen Bernstein BioWorld Staff

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