Cancer biotech BeyondSpring hit by weak IPO

Cancer biotech BeyondSpring has launched on the Nasdaq stock exchange – in an IPO that can only be described as distinctly underwhelming.

The company is developing the cancer drug plinabulin, and had hoped to raise $100 million through the IPO, later revising the target down to $10 million.

But in the end the biotech raised just under $3.5 million from the IPO, although it did raise just over $50 million with a private placement.

The company priced its IPO of 174,286 shares at $20 each, at the bottom end of expectations, in a launch which failed to capture the imagination of investors.

According to IPO investment specialist Renaissance Capital, this gives BeyondSpring a market value of around $453 million.

 

Led by CEO and entrepreneur Dr Lan Huang, the company’s lead candidate is plinabulin, a lung cancer drug in late stage development.

The company is planning a further use for the drug as a stimulator of white blood cell activity following chemotherapy.

The company hopes to keep R&D expenses to a minimum by conducting the bulk of clinical research in China, taking advantage of the country’s large population and links with the regulatory authorities to cut development time and costs.

Huang rang the opening bell on the stock exchange in line with IPO tradition, but had to put on a brave face following the disappointing response from investors.

Difficult conditions for biotech IPOs

After several years of a welcoming environment for biotech IPOs, investor interest fell back in 2016, and has continued into 2017.

Other companies gearing up for IPOs have had second thoughts – in February, opioid addiction implant maker Braeburn Pharma pulled its IPO.

Braeburn filed to go public in December and had hoped to raise $7.7 million with the offering – but decided against the move, sensing market conditions were against them.

Jounce fared better with its late January IPO, raising $104 million with its Nasdaq launch – the immuno-oncology specialist had aimed to raise $75 million but easily beat this target by increasing the size of its offering and upping the price to $16 per share – $1 above the top of the target range.

Also launched this year is obstetrics specialist ObSeva, in late January – amid predictions of around 30 pharma and biotech IPOs this year.

mRNA specialist Moderna Therapeutics and diabetes drug firm Intarcia are among those tipped to go public this year.

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