IPO roundup: Is the window slamming on life sciences?

It’s sure starting to look that way. News that Archemix, a Cambridge, Mass., developer of aptamer-based drugs, yesterday withdrew its $72.5 million IPO follows closely on the heels of several other recent several other IPO collapses, including those of implantable diagnostic maker Transoma Medical and biotechs Biolex Therapeutics and BG Medicine. (Our coverage is here, here and here.) Transoma, in fact, had set its offering terms just a few weeks earlier. Most everyone, of course, is citing ubiquitious unfavorable “market conditions” as a reason for the withdrawals.

None of this exactly comes as a surprise, given that the subprime-mortgage crisis and related fallout has blown off 20 percent of the Nasdaq’s value since its recent October high. Yet hope continues to spring eternal. Last week, MAKO Surgical just filed to raise as much as $94 million for its robotic knee-implant system. The previous week, hepatitis drug-developer Phenomix filed for an $86.3 million IPO, and in early January Bayhill Therapeutics began looking for $86.3 million.

The pace of IPO withdrawals, however, seems to be accelerating. By my count, only one life-science startup — arterial-stent maker Devaxyanked its IPO in December. (Precision Therapeutics also dropped its IPO that month, but went public via a reverse merger.) In January three more — Bioheart (our coverage), Elixir Pharmaceuticals (our coverage) and BG Medicine — followed. Now, in just the first week of February, another three offerings have gone down the tubes. At this rate, it should be a rout by next week.

Completed life-science offerings have also grown far rarer, even accounting for the generally anemic biotech-IPO market over most of 2007. In the last 60 days, only MedAssets, a healthcare-IT concern, and IPC, an inpatient-care provider, have made it through the IPC gate, and both have done quite well — IPC is up 38 percent since its Jan. 24 offering, while MedAssets has risen 24 percent since Dec. 12. Prior to that, you have to look back to three companies that priced at a discount in November — EnteroMedics (Nov. 14, now up three percent), ARYx Therapeutics (Nov. 7, now down 25 percent) and BioForm Medical (also Nov. 7, now down 29 percent).

As Matt noted last month, most life-science IPOs that have made it out of the gate over the past year or so haven’t performed very well. That stands in sharp contrast to buoyant venture-capital financings in the sector, which are apparently being sustained by the belief that big pharma and medical-device makers will continue to pony up major sums for startups with promising technology. It’s too soon to say whether that trend, too, has started to level off — my suspicion is that it may well have, although the desperation of Big Pharma, in particular, remains high — but there certainly haven’t been too many big deals in recent months.

UPDATE: Light Sciences Oncology just became the seventh IPO casualty this year.

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