One of your unquoted biotechs may soon be quoted:
In an Unsettled Market, a Biotech Company Called Fluidigm Is About to Go Public
By CLAIRE CAIN MILLER
Published: September 16, 2008
There is a tiny shred of good news for Lehman Brothers, the beleaguered investment bank: one of the investments of its Healthcare Venture Capital arm, a biotech company called Fluidigm, is set to go public this week. That is, if the markets cooperate.
Fluidigm is planning to sell its shares during one of the most tumultuous weeks in the recent history of the financial markets, and in a year that has been particularly difficult for start-ups that have gone public.
“This is terrible timing for this company,” said Scott Sweet, senior managing partner at I.P.O. Boutique, a research and advisory firm for individuals and hedge funds.
Fluidigm’s offering, which it hopes to make on Thursday unless market conditions force it to withdraw, is underwritten by Morgan Stanley. Shares will be priced at $14 to $16 and the company plans to raise $70 million to $85 million. In addition to Lehman, venture investors included Versant Ventures, Euclid SR Partners and Alloy Ventures.
“Obviously, it is a potentially tough time to be out there, and it’s gotten more complicated in the last few days,” said Michael Hunkapiller, a partner with Alloy Ventures and a member of the Fluidigm board of directors.
If Fluidigm succeeds with its offering, it will be only the seventh venture-backed company to go public in 2008, according to the National Venture Capital Association. Four of the others were biotech and health care companies and two were technology companies. In comparison, 86 venture-backed start-ups went public in 2007.
Fluidigm, which is based in South San Francisco and was founded in 1999, makes a product called an integrated fluidic circuit that is used in biological research. It is like a semiconductor chip made of rubber instead of silicon, with valves instead of transistors. Scientists use it to repeatedly mix, separate or pump minuscule volumes of fluids. The technology automates the process and makes it less costly.
Scientists have used the technology to detect mutations in cancer patients’ cells, analyze the infectiousness of avian flu and monitor the genes of salmon in fisheries, according to the company.
Shares of well-established biotech companies like Genentech and Amgen are near 52-week highs. But smaller biotechs that are new to the market, awaiting regulatory approval for products and reporting losses or small sales have been struggling since last year, Mr. Sweet said. And the poor performance of the last two public offerings, Rackspace and GT Solar, have individual investors and institutional I.P.O. players “hopping mad,” he said.
Fluidigm reported a net loss of $25.5 million on $7.3 million in revenue in 2007 and predicts losses for the foreseeable future. Those figures make the shares a tough sell at $14 to $16, Mr. Sweet said. “In this environment, when people are feverishly baby-sitting the little profits they have left in their core positions, why would they want to take a risk on Fluidigm?”
Fluidigm declined to comment because of the mandated quiet period before an I.P.O. Lehman also declined to comment.
nytimes.com |
