ddn Online

The Blog of Drug Discovery News

Shopping the market

To say that the stock market has not been kind lately for companies that want to go public would be a bit like saying that a violent ex-con might not be the best choice for a babysitter. Global economic meltdowns have a tendency to create a bit of a cooling effect for investment, particularly investment in companies that don’t have some grand legacy behind them.

Oh, there have been some ups and downs and there are promising companies, and not just in pharma and biotech, that have captured public interest. But overall, the initial public offering (IPO) scene has been a bit of a horror show for companies that want an infusion of cash, but realize they probably won’t get it from Wall Street sources any more than they will from venture capitalists and angel investors these days.

Still, that didn’t stop Menlo Park, Calif.-based Pacific Biosciences from taking the plunge Oct. 27, with the developer of single-molecule, real-time sequencing technology offering 12.5 million shares at $16 per share, the mid-point of its last estimated range of $15 to $17. The underwriters for the offering have a 30-day option to acquire an additional 1,875,000 shares at the IPO price. PacBio had initially filed for its IPO in August, seeking to raise up to $200 million. It subsequently said in an amended filing that it was seeking to raise up to $230 million, which would be the total amount raised if the over-allotment option is exercised.

The day before that news, another California company, Mountain View-based sequencing services firm Complete Genomics came out with the news that not only does it plan to offer 6 million shares at a share price between $12 and $14 per share, but that it has raised its IPO target to as much as $96.6 million from its original goal of $86.3 million. Complete Genomics noted that raising its target was in part inspired by PacBio’s stated intention to raise its own.

Are they onto something? Or is this simply a case of some rose-colored glasses being passed back and forth between companies?

We shall see…

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October 28, 2010 - Posted by | Corporate | , , , , ,

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