Three yards and a cloud of dust: Bioheart limps across the IPO goal line, but with little to show for its struggles

The New York Giants they ain’t, but the team at embattled cell-therapy startup Bioheart still managed to defy long odds and successfully dragged their company into the IPO endzone earlier today. No doubt football great Dan Marino — one of the Sunrise, Fla., biotech’s backers — fired everyone up with a suitable locker-room pep talk.

Not for Bioheart was the easy dodge of yanking its IPO due to “unfavorable market conditions” — although conditions are, in fact, pretty awful. The company’s long slog to the public markets, however, came at quite a cost. Just last September, Bioheart hoped to raise $70 million in its offering. Now, it stands to net as little as $1.5 million on the sale of 1.1 million shares once it accounts for underwriting, commissions and unspecified “offering costs” of $4.3 million. The offering values Bioheart at a bit over $75 million, which is pretty low for a public biotech, and a mere fraction of the $270 million market capitalization it once sought.

(For what it’s worth, the company says it will actually generate $4.6 million in cash from the IPO, since it’s already paid $3.1 million of those offering costs. On the other hand, the company’s founder and executive chairman, Henry Leonhardt, also apparently found it necessary to purchase just over 10 percent of the offering himself for roughly $600,000, which amounts to 40 percent of Bioheart’s net proceeds. You sure don’t see founders plunking additional cash into their companies at the time of the IPO very often.)

Any way you look at it, those proceeds represent a fairly miserable return on the year of effort Bioheart put into this offering. Since Feb. 13 of last year, the company has slashed its expected offering price twice, fired three of its underwriters (on two separate occasions), and cut the number of shares offered by almost 75 percent. This is one company that was determined to go public, no matter what it took.

I’ve given the company a fair share of grief over that time. Its leading product, a cardiac cell therapy called MyoCell, has shown decidedly mixed results in clinical trials, as I detailed back in July. Add to that its shaky cash position (just over $9 million in cash and cash equivalents as of last Sept. 30), the fact that it owes a $3 million on a technology license covering MyoCell and the looming expiration of a key MyoCell patent next year, and you still have what looks like a disaster waiting to happen. (I took a second whack at the company in October when its offering seemed to be on the brink of collapse.)

Still, I have to give the company credit for determination, if nothing else. Unfortunately, true grit only gets you so far — Bioheart’s shares traded down 25 cents today, closing at $5.

I should also note the interesting fact that two Bioheart officials — the aforementioned Henry Leonhardt and board member Peggy Farley — have apparently availed themselves of the opportunity to tout Bioheart and criticize our coverage in comments here at VentureBeat Life Sciences, despite the “quiet period” restrictions that companies normally labor under during the offering period. (Leonhardt’s comment appears here; Farley’s is here.)

I say “apparently” because I don’t have independent confirmation that these commenters are who they appear to be, although their statements do strike more or less exactly the tone of boosterism, belligerence and desperation I would have expected from folks in their position. The presumed Leonhardt comment — which came in response to an item on another Florida life-science startup slashing its offering price — includes this gem (emphasis added):

Raising $63.8 million is a great accomplishment! MAKO is another South Florida Biosciences success story! Home of Cordis, World Medical, Bolton and Bioheart, Inc. other great life science companies.

I guess $64 million does look pretty good when your own company wouldn’t have netted even $1 million without your own purchase of IPO shares. Leonhardt, by the way, now owns just over 32 percent of the company, a holding worth about $24 million at Bioheart’s current valuation. Ms. Farley, meanwhile, exercises control over a 3.4 percent stake in the post-IPO company, now worth about $2.5 million.

Separately, while I’ve previously described MyoCell as an “adult” stem-cell therapy, there’s apparently some disagreement in the scientific community as to whether the muscle-precursor cells used in MyoCell actually qualify as “stem cells.” To avoid confusion, I’ve used the term “cell therapy” here instead.