Well, a couple squeezed through today, but they lost limbs on the other side of the window as it guillotined down . . .
>>NEW YORK, June 22 (Reuters) - Investors were buying up shares in a pair of biotechnology companies that began trading on Nasdaq on Tuesday, but only after both companies reduced the prices at which they had originally planned to offer them.
Shares of Cambridge, Massachusetts-based Momenta Pharmaceuticals (NasdaqNM:MNTA - News) and La Jolla, California-based Senomyx Inc. (NasdaqNM:SNMX - News) had each risen more than 20 percent from their offering prices by midday before sliding back a bit.
But Tuesday's apparent enthusiasm is tempered by a mixed climate both for initial public offerings in the sector and for the sector as a whole that led to the last-minute price reductions, analysts said.
"Although we started the biotech year with a strong bang, I think the risk-taking appetite among investors has gone down over recent months and that is being reflected in the premium they are willing to pay for these IPOs," said Sena Lund, a biotechnology analyst for Cathay Financial.
He noted a recent string of biotech IPOs prior to Tuesday's that also reduced prices before being implemented.
"We had a good year in 2003 and early this year, but the valuations had reached a point where a correction was due," Lund said.
"We have seen biotechs sell off in the past month and a half or two and it's part of the whole downturn in biotech that's impacting these emerging biotech IPOs," he added.
Momenta shares were up $1.00, or 15.4 percent, at $7.50 after touching a high of $8.79 early in its first trading session. The offering price of $6.50 a share was reduced from a previously stated range of $7 to $9.
Senomyx twice reduced its proposed share price, starting with a range from $13 to $15 per share, then lowering it to a range of $7 to $8, before settling on $6 per share.
Senomyx shares were up $1.12, or 18.7 percent, to $7.12 after earlier reaching $7.70.
Perhaps the year's most successful biotech IPO has been Eyetech Pharmaceuticals (NasdaqNM:EYET - News), which has seen its share price more than double since its initial offering at $21 per share in late January.
Eyetech -- which along with Pfizer Inc. (NYSE:PFE - News) is developing a treatment for the leading cause of blindness in the elderly, age-related macular degeneration -- has seen its shares top $49. They were trading for $44.06 on Nasdaq on Tuesday afternoon. <<
These companies will have to do early secondaries, and if the market still sucks . . . we could see a whole passel of Rigels.
We'll see about Theravance.
Cheers, Tuck |
