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Biotechnology IPOs lose ground

Biotech and pharma stocks which have gone public since January 2007 initially did well, but soon lost ground in the months following

A Forbes report has revealed that biotechnology and pharmaceutical stocks which have gone public since January 2007 initially did well, but soon lost ground in the following months.

Amicus Therapeutics, which focuses on developing treatments for genetic diseases, opened at USD 16 per share on 31 May, but the stock dropped 27.9 per cent to close at USD 11.54 on 27 June.

Molecular Insight Pharmaceuticals, which develops radiotherapies and diagnostics for cancer, opened on 2 February 2007 at USD 14.10, which was slightly higher than its pricing of USD 14. The stock has dropped 32.8 per cent from the offering price since then, closing at USD 9.48 on 27 June.

3SBio, a Chinese biotechnology company specialising in anaemia treatments, opened at USD 17.50 on 7 February, or 9.4 per cent higher than its USD 16 offering. The stock has since dropped 39.2 per cent to rest at USD 9.72 (EUR 7.14).

Several other stocks, including Helicos BioSciences, Pharmasset and Rosetta Genomics have also dropped since their IPO debut.

Despite the gloom, Biodel, which develops diabetes and osteoporosis drugs, opened at USD 16.50 on 11 May, or 10 per cent above its pricing of USD 15. The stock continued gaining ground, rising 18.1 per cent to close at USD 19.49 on 27 June. Also, Orexigen Therapeutics, which is developing obesity treatments, opened 26 April at USD 12.50, priced at USD 12. The stock gained 20.2 per cent since, closing at USD 15.02 (EUR 11.03).

In total, there were 115 IPO's in H1 2007, according to Renaissance Capital, with proceeds totalling USD 26bn (EUR 19.1bn). Fewer than 25 per cent of the IPO's came from healthcare companies, which includes the biotechnology and pharmaceutical sectors.

4th July 2007

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