How do the revised rules in the Bipartisan Budget Act of 2015 affect you and your business?
A variety of factors appear to have affected the IPO, industry watchers say. Several point to turmoil in the American stock markets as well as financial problems in European markets.
Sponsor Generated Content
The Louisville-based company is developing therapeutic drugs for pancreatic cancer and for Hepatitis B and C, among other research projects.
Investors see biotechnology companies as a more risky bet than utility companies, for instance, so biotechnology companies are likely to do worse when it comes to raising money in an uncertain financial environment, said Dave Traylor, a managing director at Headwaters MB in Denver, an investment bank.
“There’s uncertainty, and financial markets hate uncertainty,” Traylor said. “It has nothing to do with GlobeImmune per se. It’s just the general market malaise.”
The GlobeImmune delay doesn’t necessarily mean the IPO won’t happen, said another prominent Colorado biotechnology-industry person who declined to be named. The person also declined to say whether the IPO would be withdrawn.
GlobeImmune filed documents on July 2 that said the company plans to raise $74.74 million by offering 5 million shares at a price range of $11 to $13. At that time, the company said it expected to use the money for future drug research and to prepare a manufacturing facility. The company plans to list on the Nasdaq national market under the ticker symbol GBIM.
Companies typically go public in a two-month window after filing IPO plans. There were no biotechnology IPOs in the second quarter from April to June, the first time the sector has had no such movement since 2008, Traylor said. There have only been three in the past year, he said, all in July.
“An IPO window is open when a lot of companies are filing,” Traylor said. “The window is not open right now, for all intents and purposes.”
Wells Fargo Securities and Piper Jaffray & Co. are joint book runners on the deal. Representatives from those national firms declined to speak about the delay, citing the quiet period surrounding an initial public offering required by the U.S. Securities and Exchange Commission. Company officials did not return calls for comment and have said in the past that they also are under the quiet period.
As of June 30, the company reported cash on hand of about $6 million and working capital of negative $3.8 million, according to documents filed with the SEC.
The company’s drug products for cancer and infectious diseases are based on its proprietary Tarmogen platform, according to SEC documents. Tarmogens activate a patient’s immune system by stimulating a group of white blood cells called T cells, which destroy infected or malignant cells in the body, according to the documents.
GlobeImmune’s lead pancreatic cancer drug is undergoing clinical trials required by the U.S. Food and Drug Administration before a drug can be marketed and sold commercially. Altogether, GlobeImmune has four Tarmogen products going through five clinical trials.
GlobeImmune is backed by venture capital companies including Morganthaler Partners LLC in Boulder and HealthCare Ventures LLC in Cambridge, Massachusetts, each of which has a 14 percent stake, according to SEC filings. Sequel Venture Partners LLC and Wexford Capital LP in Greenwich, Connecticut, hold a 9 percent stakes in the company. Lilly Ventures I LLC in Indianapolis and Medica Venture Partners in Herzliya, Israel, each hold a 6 percent stake.
The company also is collaborating on research projects with other biotechnology heavyweights in the industry — Celgene Corp. (Nasdaq: CELG) in Summit, New Jersey, and Gilead Sciences Inc. (Nasdaq: GILD) in Foster City, California.