Four biotech companies executed initial public offerings (IPOs) in early May that all raised significantly less money than had originally been planned. The financings follow a wave of arrested public offerings in March and April during a wide-scale selloff in the industry (Nat. Biotechnol. 18, 365). In mid-May, the market continued to fluctuate erratically, significantly down from the high of three months ago, and some analysts and industry executives suggest that only companies in dire need of funds would choose to proceed. Others, however, argue that the amounts raised recently should be put into proper historical context. They also point to the different dynamics of primary and secondary offerings to explain why some IPOs are moving forward, while many follow-ons remain suspended.
Virologic (San Francisco, CA), Orchid Biosciences (Princeton, NJ), Genomics Solutions (Ann Arbor, MI), and Paradigm Genetics (Research Triangle Park, NC) all amended their original IPOs. With the exception of Orchid, the companies withdrew or postponed their offerings before ultimately proceeding. The IPOs raised between 44% and 58% less than the companies had initially hoped—a contrast to the start of the year when public offerings were the biggest ever seen (Nat. Biotechnol. 18, 140). For instance, Genomic Solutions and Paradigm both hoped to raise $100 million when they originally filed in February. But Genomic Solutions managed to raise only $56 million through the sale of 7 million shares on May 5, and Paradigm only $42 million, even though it increased the number of shares on sale from 5 million to 6 million.
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