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NewLink IPO earns $43M

by David Holley | Published November 14, 2011 at 2:46 PM

NewLink Genetics Corp.'s initial public offering Friday, Nov. 11, fell short of the company's hopes, a performance in line with other life sciences capital raises this year.

The Ames, Iowa, biopharmaceutical company priced at $7 per share, well short of its planned $10 to $12 per share offering, earning NewLink $43 million by selling 6.2 million shares. While the offering missed NewLink's projections, the deal is the first drug development public offering since late July, when Horizon Pharma Inc. went public for $9 per share, also below its expected range of $10 to $12 per share.

That NewLink priced at all after a months-long lull could be a positive sign for other upcoming offerings, including Clovis Oncology Inc.'s IPO, expected to price Tuesday. Clovis has executives with experience in the biotech arena -- they ran Pharmion Corp., which announced in 2007 it would be acquired by Celgene Corp. for $2.9 billion -- something that has provided speculation that Clovis could perform better than most other life sciences offerings this year. Clovis, however, does have lofty goals, hoping to sell 9.3 million shares for $13 to $15 each in hopes of reeling in $130 million.

From Tranzyme Inc., of Research Triangle Park, N.C., to Parsippany, N.J.-based Pacira Pharmaceuticals Inc., life sciences public offerings have been stymied in 2011 by uncertainty about healthcare reform, the riskiness of companies with unproven drug candidates, and the broadly depressed financial markets. Tryanzyme priced for $4 per share in March instead of $11 to $13, raising $54 million. Pacira went public for $36.8 million, selling its shares for $7 each instead of $14 to $16.

NewLink's lead candidate, an immunotherapy for pancreatic cancer, is still in Phase 3 clinical trials, which may have been a detriment in the market's eyes. If so, that can't be a good sign for Clovis, which is enrolling patients in a Phase 3 trial for a first-line metastatic pancreatic cancer drug. Clovis, of Boulder, Colo., also has a Phase 2 trial in the works for a second-line treatment.

Though NewLink is the first drug-based IPO since July, one other healthcare company has gone public since, receiving a similar response. Zeltiq Aesthetics Inc., which makes a medical device meant to trim fat, made $91 million by selling its shares for $13 apiece, under its $14 to $16 expectations.

In addition to Clovis, Cambridge, Mass.-based Verastem Inc. also announced earlier this month that it will test the public markets. Although Verastem has high-profile individuals such as Henri Termeer and Christoph Westphal involved with it, the company faces an uphill battle. All of its cancer tumor-targeting drugs are in preclinical development. The company's managers and venture investors, who have provided $48 million in capital since its founding in November 2010, appear to be confident and are pushing forward with a $50 million planned offering.

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NewLink IPO earns $43M

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