Challenging Times for European Biotech IPOs

European private investors are faring no better than their US counterparts when it comes to IPOs in 2005. Both sides of the Atlantic have been plagued by problematic public markets that have resulted in public offerings at or below estimated pricing ranges and difficult aftermarket environments. (See Exhibit 1.) So far this year five firms have hit Europe's main markets: Ardana Bioscience Ltd. on the London Stock Exchange [See Deal], Intercell AG in Vienna [See Deal], Paion AG in Frankfurt [See Deal], Arpida Ltd. on the Swiss Exchange [See Deal], and, most recently as of START-UP press time, Galapagos Genomics NV in Amsterdam and Brussels [See Deal]. Much like in the US, others including Scotland's Cyclacel Ltd. , have gotten cold feet and pulled their offerings [See Deal].

While US companies have traditionally enjoyed public market support unavailable to European companies, those days are seemingly gone. The wave of private biotech M&A—which has on the whole been focused...