IPO in three years, no revenue

Here’s the latest Silicon Valley company to file for an initial public offering despite having no source of revenue. It’s a biotech company, so we’ve been here before, and ibankers seem ready to extend the tradition.

Redwood City’s Threshold Pharma plans for a market value of $468.8 million once its shares start trading. Hmmm, a bit bold for a 3-year old company that has this to say about its business in its filing with the SEC:

We have experienced operating losses since our inception, and we expect to incur significantly greater operating losses for the next several years as we advance our clinical development programs. None of our product candidates has been approved for sale by the FDA, and we have not generated any revenue since our inception. If we are unable to develop, receive regulatory approval for and successfully commercialize any of our product candidates, we will be unable to generate significant revenues, and we may never become profitable.

Others have noted the rather bubbly nature of the IPO market lately.

Threshold had a loss of $15.7 million for the nine months ended Sept. 30. Its venture backers include Morganthaler Partners, Pequot Capital Management, ProQuest Investments, Three Arch Partners, Sofinnova Ventures and Sutter Hill Ventures. The company uses Metabolic Targeting technology in the development of cancer treatments. The company’s lead product candidate is in Phase II of its clinical trials.