Reverse Mergers Gain Traction In Tough IPO Times

Reverse mergers like Micromet's takeover of Cancervax and Cyclacel's takeover of Xcyte Therapies illustrate both tough times for IPO contenders as well as the innovative and sometimes win-win solution a reverse merger can provide.

The world of biotech business often mimics the rough-and-tumble world of the animal kingdom—companies preen for investors as if searching for mates, for example, and the fierce competition in each sphere is well documented. Now, a recent trend toward reverse mergers—whereby a product or technology-rich firm reaches the public markets through the acquisition of a down-on-its-luck but comparably cash-rich public company—adds another parallel.

In the recent popular documentary the March of the Penguins, we learn that the female emperor penguins that have recently...

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