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Few IPOs Fighting the Biotech Tide

 
• By Chris Morrison

The thirteen biotech companies that have listed this year are hardly the poster children for good returns. But even after various haircuts and modest step-ups (the average pre-money step up for our group here is roughly 2.5) 2005's class has continued to suffer once public trading commences.

That the public market's appetite for new biotech issues is in the doldrums is no surprise. (See Exhibit 1). The 14 biotech companies that have listed this year are hardly the poster children for good returns. But even after various haircuts and modest step-ups (the average pre-money step up for our group here is roughly 2.5), 2005's class has continued to suffer once public trading commences. (See "Bad Haircuts: 2005's Biotech IPOs—Getting Out at Any Price?" START-UP, March 2005 Also see "Bad Haircuts: 2005's Biotech IPOs--Getting Out at Any Price?" - Scrip, 1 March, 2005..)

There are few signs that 2006 will bring any relief. VCs note that unlike the medical device world, it's practically...

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