Two more public biotech offerings are due this week, offering another test of whether this science sector can perform better than a dismal 2003 and an uncertain early 2004.
The new hopefuls are
of South San Francisco, which is developing drugs for the treatment of cancer as well as cardiovascular and inflammatory diseases, and
, of Berkeley, Calif., which is working on medications to help the body's immune system combat allergies, asthma and hepatitis B.
DynaVax, which withdrew an IPO in 2001, decided to try again last October. It is offering 6 million shares at a price of $12 to $14 a share, according to data compiled by Renaissance Capital and its Web site www.IPOhome.com. Lead underwriters are Bear Stearns and Deutsche Bank Securities.
Corgentech is offering 5 million shares in a price range of $14 to $16 a share. The lead underwriters are Credit Suisse First Boston and Lehman Brothers.
Looking forward, there are at least 14 other biotech, specialty drug and medical device companies with public offerings in the pipeline, according to Renaissance Capital. That means registration statements have been filed with the
Securities and Exchange Commission
but offering dates, the number of shares and precise prices haven't been set.
Broadly speaking, the sector has a mixed scorecard in recent months.
of Hawthorne, N.Y., withdrew its IPO in mid-January. The developer of drugs for treating spinal cord injuries and multiple sclerosis had been seeking to sell 4.8 million shares at $12 to $14 a share. Since early November, three other drug companies either withdrew or postponed IPOs.
As for the medical companies that have made it to market this year,
( EYET) is attracting the eyes of investors.
The New York-based company sold 6.5 million shares at $21 a share. Because of the strong demand for the stock, the underwriters exercised their option to buy an additional 975,000 shares at $21. Eyetech's stock started trading Jan. 30 at $30. In late afternoon trading Monday, the stock was at $29.95. The company is developing drugs to treat several eye diseases.
Another company whose shares remain above their offering price is
( RNVS), of South San Francisco, which is working on several treatments for neurological diseases and disorders.
Renovis had hoped to issue shares at $13 to $15 a share. Instead, it settled for 5.5 million shares at $12. The stock opened at $12.15 on Feb. 5. By midafternoon Monday, it was trading at $16.56.
But one biotech company is trading below its recent offering price.
, a Memphis, Tenn.-based company working on prostate cancer treatments, priced its initial offering of 5.4 million shares at $14.50 a share. The stock opened at $15.27 on Feb. 3 but has pulled back. By midafternoon Monday, it was trading at $12.75.
At least in its first few days of trading, GTx looks like a holdover -- or better yet, a hangover -- from biotech's paltry performance last year
"Hands down, the worst-performing deals in 2003 were biotech and specialty pharmaceuticals," says a Renaissance Capital review of last year's offerings. "Investors were not willing to buy into the promise of future profitability and generous valuations."
Among the 68 IPOs that were priced last year, Renaissance Capital says the four worst performing stocks -- comparing the offering price to the closing price at year's end -- were biotech and/or specialty drug stocks. Of the eight drug companies that went public last year, all but one traded below their offering prices by year-end.
But the picture looks a little better when Renaissance Capital examined the performance of biotech and specialty drug IPOs over the last 12 months. Five companies' shares are now trading above their offering price, while five are below. The two worst performers are drug companies.