VentureBeat

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 Devax — yanked 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.

Featured companies: Apex Radiology, Arcxis Biotechnologies, EKR Therapeutics, Franklin & Seidelmann, Michelson Diagnostics, SensiGen, Vascular Closure Systems

UPDATED: Expanded items on Arcxis, Vascular Closure and Archemix.

Arcxis pulls in $2M for DNA tools — Arcxis Biotechnologies, a Pleasanton, Calif., biotech tool maker focused on analysis of DNA and proteins in biological samples, raised $2 million in a follow-on to its first funding round, VentureWire reports (subscription required). Investors included Kaiser Permanente Ventures and Claremont Creek Ventures.

Arcxis released its first product, a kit for anthrax detection, earlier this year. The company is in the process of raising a second round, which it hopes to complete by February. Arcxis previously raised $2.3 million from Claremont Creek in 2006.

Vascular Closure raises seed funding to close femoral-artery punctures — Palo Alto, Calif.-based Vascular Closure Systems, a medical-device maker focused on ways to close up the surgical punctures caused by minimally invasive heart procedures, raised an undisclosed amount of seed funding. The company didn’t disclose its investors.

Vascular’s technology, which the company doesn’t describe in detail, aims to make blood-vessel punctures more cost effective as well as easier for surgeons to learn and use. The device apparently comes in bioabsorbable, removable, and permanent-sealing designs. Such punctures are often used in heart procedures such as inserting stents to prop open blocked vessels; those devices are frequently put in place using a catheter that is threaded up through the femoral artery.

Aptamer-drug maker Archemix sets IPO range, aims for $72.5M take — Cambridge, Mass.-based Archemix, a developer of drugs based on nucleic-acid fragments called aptamers, raised its IPO sites and now plans to raise as much as $72.5 million. Archemix had previously outlined a $69 million IPO in July; our coverage is here.

The company now plans to offer up to 5.2 million shares at $12 to $14 apiece. The offering could value Archemix at as much as $261.2 million, which PE Hub notes is “virtually identical” to the company’s valuation at the end of its last VC round.

OTHER HEADLINES OF NOTE:

• Michelson Diagnostics gets £600K for tumor imaging (VentureWire)
• Franklin & Seidelmann acquires Apex Radiology, expands into full-service teleradiology(release)
• Specialty pharma EKR Therapeutics arranged debt facility (release)
• SensiGen draws $300K for molecular diagnostics (release)

(UPDATED: See below.)

Featured companies: FoldRx Pharmaceuticals, Ophthotech, Pevion Biotech, Restoration Robotics, Glide Pharma, Reliant Pharmaceuticals, Nanosphere, SurModics, BioFX Laboratories

FoldRx Pharma to receive $22M against cystic fibrosis — Cambridge, Mass.-based FoldRx Pharmaceuticals, a biotech focused on diseases that result from misfolded proteins, will get $22 million over the next five years from an affiliate of the Cystic Fibrosis Foundation to further its work against the genetic lung disease. The money will be paid as FoldRx meets various developmental milestones, including pushing two experimental drugs into early-stage human trials. The company’s current drug candidates, however, don’t target cystic fibrosis, and instead aim to take on a particular class of diseases known as amyloidosis and Parkinson’s disease.

The Boston Globe and the WSJ Health Blog have more.

Newly formed Ophthotech raises $36M against eye disease — Ophthotech, a newly formed Princeton, N.J., biotech with a focus on eye disease, raised a whopping $36 million in a first funding round. The company, founded by a bevy of former Eyetech Pharmaceuticals officials, is going to follow directly in the former company’s footsteps by taking aim at age-related macular degeneration with aptamers licensed from Archemix (which we wrote about here).

Investors in the round included SV Life Sciences, HBM BioVentures and Novo A/S. (See update below.)

Pevion Biotech gets $29M for vaccines — Pevion Biotech, a Bern, Switzerland-based vaccine developer, raised $29 million (CHF35 million) in a first funding round. Investors included BZ Bank Aktiengesellschaft, BB Biotech Ventures II, CC Private Equity Partners and Bachem Holding. The company is conducting clinical trials of vaccines against malaria, breast cancer and hepatitis C.

Hair-transplant automator Restoration Robotics raises $25M — Restoration Robotics, a Mountain View, Calif., developer of robotic surgery systems for hair transplants, raised $25 million in a second round of funding, PE Hub reports. The company’s Web site is a stub and the linked article doesn’t contain much information, but an April VentureWire store republished at Alta Partners’ site gets to the root of the matter:

Sutter Hill Ventures and Alloy Ventures, for example, have invested in the first and second rounds raised in 2005 and 2006, respectively, by Restoration Robotics Inc., which is testing a robotic device that performs hair transplants. Transplant-surgery outcomes vary according to the surgeon’s skill. Restoration’s robot — which is surgeon-controlled — produces uniform results in half the time, says CEO Jim McCollum. Investors hope this pushes hair transplants into the mainstream. Today, “people think of late-night commercials when they think of hair restoration,” says Sutter Hill Managing Director Jeffrey W. Bird.

Investors in the round include InterWest Partners, Alloy Ventures and Sutter Hill Ventures.

Glide Pharma raises $4.6M for needle-free drugs — U.K. specialty pharma Glide Pharma raised $4.6 million (£2.3 million). Investors included Oxford Technology 4 VCT and Oxford Capital Partners. The company is developing drugs that can be delivered via its own needle-free injection system. We’ve written about other startups pursuing similar technology, including StrataGent Life Sciences and Macroflux.

Reliant Pharma refiles for a $400M IPO — Reliant Pharmaceuticals, a Liberty Corner, N.J., specialty pharma that withdrew a planned $300 million IPO in 2005, is going to try again, only with more at stake. The company filed to raise as much as $400 million in an offering, despite the fact that it is on track to lose more than $100 million this year, which would be the third time in four years it has done so.

In the first six months of this year, Reliant reported a net loss to common shareholders of $56.4 million on revenue of $230 million. That net loss would have been only $21.8 million but for preferred-share dividends of $34.6 million in the half. Reliant sells a variety of unrelated second-hand drugs for cardiovascular problems.

Interestingly enough, Reliant made its last charge at the public markets with the famed Ernest Mario at the helm. Mario jumped from Reliant just last week, and is now CEO of the little-known Capnia (see our coverage here).

Nanosphere aims for outsized $100M IPO — Nanosphere, a Northbrook, Ill., developer of nucleic-acid and protein detection and diagnostic systems, filed to raise as much as $100 million in an IPO. As of March 31, the company had an accumulated deficit of $112.6 million. Earlier this year, it submitted its Verigene molecular-diagnostic system to the FDA for approval; Nanosphere intends to market the device to hospital laboratories that currently aren’t equipped to perform such tests in-house.

SurModics snaps up diagnostic-supply company BioFX for up to $22.7M — SurModics, an Eden Prairie, Minn., developer of drug formulations and other biological supplies, agreed to acquire BioFX Laboratories of Owings Mills, Md., for $11.3 million in cash and milestone payments worth up to $11.4 million. The release is here. The acquisition is the second for SurModics this month; it bought out Brookwood Laboraties on Aug. 2 (our coverage is here).

UPDATE (2:37pm PT): Added items on Glide Pharma, Reliant Pharmaceuticals, Nanosphere, and SurModics/BioFX Laboratories.

UPDATE REDUX: Over at Pharma’s Cutting Edge, Fred Cohen notes what I didn’t have time to, which is that Ophthotech essentially amounts to a do-over for the architects of Eyetech’s failure. Check it out.

(UPDATED: See below.)

It’s been a long, barren summer for biotech IPOs, but ImaRx, the blood-clot company we featured here, finally managed to bull its way into the public markets. The company, which withdrew an earlier $75 million IPO and lowered its offering price on the current one, finally finally priced its IPO at its most recent target of $5 a share, selling three million shares for an anemic take of $15 million, excepting fees and possible overallotment sales.

That makes ImaRx the first biotech to make it to the public markets via an IPO in almost two months. The slowdown hasn’t stopped companies from filing — yesterday Archemix joined the list, and the day before brought us Cumberland Pharmaceuticals setting its offering price. Still, the backlog is building: Over at Signals Magazine, Jennifer van Brunt counts 12 outstanding IPO filings (13, actually, but only because she still lists NovaCardia, which which Merck bought out yesterday), the oldest of which — Light Sciences Oncology — has been at the starting line for over a year.

Much of the holdup reflects the fact that most of the biotechs that have gone public this year haven’t done well at all in the market. Response Genetics, for instance, went public on June 4, and has since fallen 13 percent. Jazz Pharmaceuticals, which we hazed here, here and here, lowered its offering price several times and is still down 20 percent. Amicus Therapeutics, which actually has an interesting technology, is down 23 percent. (Stock data courtesy of Renaissance Capital’s IPOHome.)

And so it goes, right down the line. Of the 17 biotech IPOs this year, only six — Sirtris Pharmaceuticals, Biodel, Pharmasset, Orexigen Therapeutics, Tongjitang Chinese Medicines, Optimer Pharmaceuticals — are trading above their offering price. Biotech investors are used to long odds, but at the moment, it’s hard to blame them for being a bit standoffish where new offerings are concerned. They’ll soon get a chance to test their mettle again, as the next few weeks are expected to bring Sucampo Pharmaceuticals and Cumberland Pharmaceuticals to the gate.

UPDATE: This item, which began life as a brief notice of the ImaRx IPO pricing, has morphed into a fuller take on the miserable state of the biotech IPO market.

UPDATE REDUX: So far, the odds of ImaRx breaking the IPO slump are looking pretty long. At about 10:45 a.m. Pacific time, the stock is trading down at $4.75, down five percent.

FINAL UPDATE: ImaRx closed its first day at $4.79, down 4.2 percent.

(UPDATED: See below.)

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