June
2007 issue
Nine Health Care IPOs Priced
Wall Street Greets Most New Stocks With Warm Reception
We can’t recall the last time we saw nine health care companies price IPOs
in the same month, and more potential winners are likely in the pipeline.
Plus, the one withdrawal of the month looks like it could be an acquisition
candidate.
...
Investors Take
Cardiology To Heart
Cardiac Devices, Drugs Attract Increased Venture Funding
Since we began tracking health care venture capital investments, an
increased amount of funding has flowed to cardiac devices and cardiology
applications; we explored the increase with some investors involved in this
space.
...
Mergers & Acquisitions
The health care M&A market is flush with capital, teeming with transactions,
in the sights of several private equity firms, and bearing fruit for some
venture investors and entrepreneurs.
...
Venture Capital
Although there wasn’t quite as much activity as last month, numbers are
still up for May 2007 compared with the prior year, and strategic investors
cropped up in a few deals this month.
...
Private Equity
Among publicly traded health care companies,
during May biopharmaceutical and biotechnology companies raised most of the
private equity capital, with pharmaceutical and medical device companies
also announcing a few deals.
...
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News Read the past
headlines.
Companies Mentioned in this issue:
June 2007
5AM Ventures p 11
A
ABS Ventures p 10
ABV Holding Co. p 11
Acura Pharmaceuticals p 14
Advanced BioHealing p 11
Advanced Cell Tech. p 8
Advanced Magnetics p 4
Advanced Technology Ventures p 10
Advanced Technology Ventures p 10, p 11
Advancis Pharmaceut. p 4
Aegerion Pharmaceut. p 4
Aeolus Pharmaceuticals p 14
Aescap Venture Management p 11
Aetna p 8
Aetna Ventures p 11
Affinity Capital p 2
Albany Molecular Res. p 8
Alliance Hospital p 8
Alliance Imaging p 4
AllianceBernstein p 9
Alta Biopharma p 5
Alta Partners p 10,
p 11, p 15
Alternative Treatment International p 16
Altitude Life Science Ventures p 10, p 15
Ambrilia Biopharma
p 14
Amedica p 4, p 11
American Society of Plastic Surgeons p 16
Amicus Therapeutics p 4
AMN Healthcare Svs. p 8
AmSurg Corporation p 8
Andover Medical p 14
Annual Scientific Assembly of the American Thoraci
p 15
Antares Pharma p 14
Aperio Technologies p 11
APNEX Medical p 11
Arcturus Capital p 11
Arete Therapeutics
p 15
Array Biopharma p 4
Ascension Health Ventures p 11
Asmacure p 11
Asthmatx p 15
ATC Healthcare Svs. p 8
Atlantis Components
p 11
AtriCure p 14
Avalon Pharmaceuticals p 13
AVEO Pharmaceuticals p 15
Avestha Gengraine Technologies p 11
Avid Radiopharmaceuticals p 11
Axxora Life Sciences p 8
B
Banc of America p 5
BaroFold p 11
Barr Pharmaceuticals p 7
Bauch & Lomb p 8
Bausch & Lomb p 9
BBT Fund p 10, p 15
Be-Tabs Pharmaceuticals p 8
Bear, Stearns p 4
Beecken Petty O’Keefe & Company p 7
Berry Medical Employment p 8
Bessemer Venture Partners p 10, p 11
Bio-Imaging Research p 8
Bio-Rad Laboratories p 8
Bioabsorbable Therapeutics p 3,
p 11
Biodel p 5
Bioenvision p 8
Biogen Idec p 15
Biolex Therapeutics
p 10
BioMedical Ventures
p 10
Biomerk p 8
BioProgress p 8
Biosante Pharmaceuticals p 14
Biosite p 8, p 9
BioStar Funds p 3
BioStorage Technologies p 11
Biotechnology Value Fund p 13
Blackmont Capital
p 13
Boston Life Sciences p 14
Boston Millennia Partners p 5
Boston Scientific p 1
Boulder Ventures
p 11
Bovie Medical p 8
Bristol-Myers Squibb p 8
Brooks Eckerd Pharmacy p 7
Brookside Capital p 9
Burrill & Company
p 11, p 15
C
Cambridge Heart p 4
Cantor Fitzgerald p 4
Canyon Creek Devel. p 8
Cardinal Health p 7, p 8
CardioMEMS p 4, p 5
CardioVascular BioTherap. p 14
Cardiovascular Innovations p 8
Cardium Therapeutics p 4
Catella Healthcare
p 10
CCS Medical Holdings p 4
Ception Therapeutics p 11
Champions Biotechnol. p 8
Charles Street Securities p 11
Chattem p 8
CIBC p 4, p 5
CIDC p 10
Citi p 4
Clayton, Dublier & Rice p 9
Community Hlth. Sys. p 8
Connecticut Innovations p 11
CoreValve p 3
Cowen p 4
Creation Capital p 11
Credit Suisse p 1, p 4
Crest p 16
Cumberland Pharma. p 4
CVRx p 3
Cypress Bioscience
p 4
Cytyc p 7, p 8
D
D.A. Davidson p 4
Delphi Ventures p 10
Deutsche Bank p 4
Devax p 3
Devonshire PGA National p 8
DFJ Frontier p 11
DiaMed Holding p 8
Digirad p 8
Domain Associates
p 11
Dow Venture Capital p 10
E
Earlybird Venture Capital p 11
Easton Capital p 10
Encorium Group p 14
Endocare p 14
EndoCeutics p 4
Ensign Group p 4
EnteroMedics p 4
Enzo Biochem p 8
Essex Woodlands
p 11
ETF Venture Funds
p 7
Eurand N.V. p 4
EUSA Pharma p 3
EvoGenix p 8
F
Federated Kaufmann Fund p 13
Finistere Ventures
p 3, p 11
FirmInvest AG p 14
First Albany Capital
p 4
Flagship Ventures
p 10
Fonds Bio-Innovation p 11
Forest Laboratories
p 16
Foundation Capital
p 11
Foundation Medical
p 5
Foundation Medical Partners p 10
Frazier Healthcare
p 10, p 11
Frazier Healthcare Partners p 15
Frazier Healthcare Technology p 10
Frazier Healthcare Ventures p 10
Frazier Healthcare Ventures p 14, p 15
Fusion Capital. p 4
G
Galen Partners p 11
Genomic Health p 4
Genzyme Corporation p 8
Goldman, Sachs p 9
GPC Biotech p 12
Green Light Capital
p 11
H
H&B Capital p 10
Halozyme Therapeutics p 12
HBM BioVentures (Cayman) p 11
HealthSport p 8
Helicos Biosciences
p 4, p 5
Hemispherx Biopharma p 4
Hercules Healthcare Technology Growth Capital p 10
Highland Capital p 10
Highland Capital Management p 14
Hologic p 7, p 8
Hunt BioVentures
p 13
I
Iasis Healthcare p 8
IBG p 10
IBTM p 10
ImaRx p 4
Immunomedics p 13
InfoLogix p 8
InnerPulse p 3
Innovatech Quebec
p 11
Innoven Partenaires p 14
InnoZen p 8
Inovio Biomedical
p 14
Insmed p 14
Insulet p 4
Insulet Pharmaceuticals p 1
InteliStaf Holdings
p 8
Intersouth Partners
p 10
Interventional Spine p 11
InterWest Partners
p 10
InterWest Partners
p 10, p 11
Intrexon p 11
Inverness Medical
p 8, p 9
Investor Growth Capital p 10, p 11
IOMED p 8
ITX International Equity p 3, p 11
J
J-Plasma p 8
Javelin Pharmaceutic. p 4
Jazz Pharmaceuticals p 1, p 4
Jefferies & Co. p 4
JM Financial p 15
John Curtin School of Medical Research at The Aust p 12
Johnson & Johnson Development Corporation p 10
Johnson & Johnson Development Corporation p 15
Johnson Matthey PLC p 14
JPMorgan p 4
K
Kleiner Perkins Caufield & Byers p 11
L
Latterell Venture Partners p 11
Lazard Capital Markets p 12, p 13
Lehman p 4
Lehman Brothers p 1
LehmanBrown International Accountants p 9
LeMaitre Vascular p 8
Life Without Pain p 8
Lusora Healthcare Systems p 14
Lux Capital p 11
M
Madison Dearborn
p 8, p 9
Manhattan Pharmaceu. p 4
Marcadia Biotech p 11
Maxim Group p 4
Maxor Natl. Pharmacy p 8
McGraw-Hill Construction p 16
Medcath p 4
Medfocus Funds p 3
Medical Staffing Ntwk. p 8
Medtronic p 2
MemberHealth p 8
Merck KGaA p 7, p 8
Merlin BioMed Group p 10
Merlin Nexus p 13
Merrill Lynch p 4
Mitsubishi UFJ Financial Group p 10
Mitsui & Co. Venture Partners p 10
Modigene p 14
MonoSol Rx p 4
Morgan Stanley p 1, p 4, p 11
Morria Biopharmaceuticals
p 11
MPM BioVentures IV
p 11
MPM Capital p 11
Mylan Laboratories
p 7, p 8
Mytogen p 8
N
Natexis Bleichroeder p 1
Nationwide Health p 4
Naviscan PET Systems p 11
Neurogesx p 5
NeuroVista p 10
New Enterprise Associates p 11
New River Management V p 11
New River Management V, LP
p 12
New York Life Investment Management India Fund p 11
NitroMed p 4
Novadaq Technologies p 13
Novartis p 7
Novartis Venture Fund p 11
NOXXON Pharmaceuticals p 10
O
Olympus Medical Systems p 15
Omnicell p 4
ONSET Ventures p 11
Oppenheimer & Co.
p 12
Oppenheimer & Company p 4
Orange Medical p 9
OrbiMed Capital p 5
Osco Drug p 7
Oxford Bioscience Partners p 10
P
Pacific Growth Eq. p 4
PainCare Holdings
p 4
PAION AG p 16
Pantarhei Bioscience p 14
Passport Management p 13
Pegasus Biologies
p 11
Peptech Limited p 8
Pequot Capital p 5
Perceptive Life Sciences Master Fund p 14
Pharmion p 4
Pharmion Corporation p 14
Pharmion GmbH p 14
Piper Jaffray p 4, p 14
PLC Medical System
p 13
Polaris Venture Partners p 10, p 11
Porter Health p 8
Portola Pharmaceuticals p 9
Power Medical Interven. p 4
Premise p 11
Prism Ventures p 5
ProCertus Biopharm
p 11
Progen Pharmaceuticals
p 12, p 13
Prolacta Biosciences
p 11
ProMed Healthcare
p 8
Prospect Ventures
p 10
Prospect Medical p 8
Prospect Venture Partners p 10
ProtAffin Biotechnologie p 11
Q
Quaker BioVentures
p 10
Quantum Group p 14
Quantum Technology p 11
QuatRx p 10
QuatRx Pharmaceuticals p 15
Quest Group p 8
QuestMark Partners
p 11
R
Radiation therapy center p 8
Radiation Thrpy. Svs. p 8
Radius Ventures p 11
Ranbaxy Laboratories p 8
RBC Dominion Securities p 13
ReAble Therapeutics p 8
Reliance Life Sciences p 11
Research and Markets p 9
Rigel Pharmaceuticals p 4
Rite Aid Corporation p 7
River Rock Lodge p 8
Rodman & Renshaw
p 12, p 14
Rothschild Investment Partners p 10
Royalty Pharma p 8
Rx Pro Health p 8
S
Sadra Medical p 3
Safeguard Scientifics p 11
Sanderling Ventures p 11
Sandoz p 7
Sav-on Drugs p 7
Savannah Commons p 8
Savvian Advisors p 14
Schaller Anderson p 8
Schering-Plough p 8, p 15
Secure Pharmacy Plus p 8
Selah SeniorCare p 8
Sidec Technologies
p 11
SightLine Partners
p 10
Signet Healthcare Partners p 11
Sirtris Pharmaceuticals p 5
Skilled Healthcare Group p 4, p 5
Sofinnova Partners
p 10
Solace Pharmaceuticals p 11
Special Situations Life Sciences Fund p 13
SpectraScience p 14
Spectrum Pharmaceuticals p 12
Spring Mills Venture Partners p 11
Sprout Group p 10
Standard Mgmt. Corp. p 8
STARLIMS Technol.
p 4
Stifel Nicolaus p 4
Stockwell Capital p 10
StrataGent Life Sciences p 11
Sun Pharmaceutical
p 8
Sunesis Pharmaceutic. p 4
Sutter Hill Ventures
p 10
SV Life Sciences p 1
Synergy Ventures p 3
T
T. Rowe Price p 9
Take Care Health Systems p 7
Talima Therapeutics p 11
Targanta Therapeutics p 4
Taro Pharmaceutical p 8
Teachers’ Private Capital p 10
Tempo Pharmaceuticals p 11, p 15
Teton Capital p 3
Teva Pharmaceuticals p 7
Therative p 11
ThinkEquity Partners p 12
Third Point p 11
Thomas Weisel p 4
Thomas Weisel Healthcare Partners
p 10
Thomas Weisel Partners p 4, p 12,
p 15
Three Arch Partners
p 10, p 11, p 15
TL Ventures p 10
TomoTherapy p 4,
p 5
TorreyPines Therapeu. p 4
Transoma Medical
p 2
Turenne Capital p 14
Turner Construction Company p 16
TVM Capital p 10
U
U.S. Renal Care p 3
UBS p 4
UCB, S.A. p 13
Ultrascan p 8
Universal American
p 8
University of California at Davis
p 15
University of Pittsburgh School of Medicine p 16
US Venture Partners p 11
V
Valera Holdings p 10
Varian p 8
Vectura Group p 16
Venrock p 11, p 15
Venrock Partners
p 10
Ventas p 4
Venture Investors
p 11
Versant Partners p 13
Versant Ventures p 5
VIASYS Healthcare
p 8, p 9
Viragen p 4
VirtualScopics p 4
Vivo Ventures p 9
Vivo Ventures VI p 9
VWR International
p 8, p 9
W
Walgreen Co. p 7
Warburg Pincus p 8, p 9
Wexford Capital p 11
X
Xillix Technologies
p 13
Xtent p 3
Y
Younger America p 8
Z
Z-Cube p 11
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Nine Health Care IPOs Priced
Wall Street Greets Most New Stocks With Warm Reception
Email Editor
It seems to have been quite
a while since so many health care IPOs were priced in one month. During
May 2007, nine health care companies priced initial public offerings, with
most within the expected IPO price ranges. Ten secondary offerings were
priced by health care companies during the month, too, and several more
filed, as usual. One health care IPO was withdrawn, but by a rather
intriguing company that we look at more deeply. Not appearing in our chart
this month, as the IPO date was June 1, Jazz Pharmaceuticals
(NASDAQ: JAZZ) priced its initial public offering of 6,000,000 shares of
common stock at $18.00 per share, for gross proceeds of $108.0 million.
However, the IPO pricing was about 28% below the originally expected price
range of $24.00 to $26.00 per share, and also was reduced from the lowered
expected range of $20.00 to $21.00 per share. Morgan Stanley and
Lehman Brothers acted as the lead underwriters for the offering, with
Credit Suisse and Natexis Bleichroeder also participating.
Insulet
Pharmaceuticals (NASDAQ: PODD) priced
7,700,000 shares of its common stock at $15.00 per share—in the middle of
the expected price range, but with the number of shares increased by about
15%. Insulet’s primary stakeholders include Versant Ventures,
Pequot Capital, Prism Ventures, Alta Biopharma,
OrbiMed Capital and a number of individual investors. Upon completion
of the IPO, Insulet estimates its adjusted total capitalization at $151.8
million, its adjusted cash and cash equivalents at $137.7 million and its
debt and long-term liabilities at approximately $30 million. As we were
going to press, we took a look at the stock prices of Insulet and the
other companies that had priced IPOs. Shares in PODD, Skilled
Healthcare Group (NYSE: SKH), Eurand N.V. (NASDAQ: EURX),
Amicus Therapeutics (NASDAQ: FOLD) and Helicos Biosciences
(NASDAQ: HLCS), were all still trading very near their IPO prices.
The three
companies whose stock traded up the most since the IPOs were
TomoTherapy (NASDAQ: TTPY), which increased by 22%, Biodel
(NASDAQ: BIOD), up by 21%, and Sirtris Pharmaceuticals (NASDAQ:
SIRT), up by 19%. TomoTherapy, headquartered in Madison, Wisconsin and in
Belgium, has developed, manufactures and sells an advanced, versatile
radiation therapy system for the treatment of a wide variety of cancers.
For 2006, TTPY had revenue of $156.1 million and net income $12.8 million,
respectively. Danbury, Connecticut-based Biodel is a specialty pharma
focused on developing and commercializing treatments for endocrine
disorders such as diabetes and osteoporosis by applying its proprietary
formulation technologies to existing drugs in order to improve their
therapeutic results. BIOD has two insulin product candidates currently in
clinical trials for the treatment of diabetes, including one in phase III
clinical trials for both Type I and Type II diabetes. Sirtris is focused
on discovering and developing proprietary, orally available, small
molecule drugs with the potential to treat diseases associated with aging,
including metabolic diseases such as Type II diabetes. At the other end of
the spectrum, however, the price per share of Neurogesx (NASDAQ:
NGSX) had decreased by 31%, compared with its IPO price.
Coincidentally, the company that withdrew its IPO in May is focused on the
same market we explore in our other feature story this month.
CardioMEMS, which is a medical device company developing a pipeline of
cardiovascular products that leverage its core wireless sensing
technology, withdrew its IPO in May. In early April, CardioMEMS had
submitted a filing with the SEC estimating that the company would sell
6,000,000 shares at $12.00 to $14.00 per share, with underwriters led by
Banc of America and CIBC. The withdrawal cited an
insufficiently attractive market—perhaps implying a sufficiently more
attractive exit opportunity is on the horizon?
At a time when private equity and corporate buyers are hungry for
late-stage medical device technologies, we wonder if the company will
appear in our M&A pages some time soon. CardioMEMS already has developed
and is commercializing a proprietary, implantable wireless sensing and
communication technology for the human body. The company’s miniature
sensors, which are designed to become a permanent part of the
cardiovascular system, require minimally invasive surgical techniques for
implantation and electronically transmit information to physicians that is
critical to the management of patients, including cardiac output, blood
pressure and heart rate data.
CardioMEMS’ first commercial device, the EndoSure wireless AAA pressure
measurement system, or EndoSure system, was cleared by the FDA in October
2005 for measuring intrasac pressure during endovascular repair of
abdominal aortic aneurysms and is used alongside traditional angiography.
In March 2007, the FDA cleared the EndoSure system for measuring intrasac
pressure during thoracic aortic aneurysm repair. The EndoSure sensor has
been placed in more than 1,500 patients since receiving FDA clearance.
However, CardioMEMS’ FDA clearance does not allow the EndoSure system to
be promoted as a replacement for traditional angiography or for measuring
pressure after the procedure. In its most recent filing with the SEC,
CardioMEMS was seeking to raise gross proceeds of up to $96.6 million
through an IPO. Based on the same filing, for the year ended December 31,
2006, CardioMEMS reported total capitalization, on an actual basis, of
nearly $15.5 million, and did generate a gross profit of about $3.4
million, but was still operating at a loss.
In late 2005, CardioMEMS established a license, development and supply
agreement with Medtronic, to adapt CardioMEMS’ sensor technology for use
as a wired pressure sensor system capable of working with MDT’s
implantable devices to address impaired cardiac function, hypertension, or
both, with Medtronic funding these joint development efforts through a
series of milestone payments totaling $3.0 million. Under terms of the
agreement, CardioMEMS is entitled to receive royalties on sales of up to
$25.0 million on Medtronic devices incorporating its technology, and upon
reaching this royalty cap, the license becomes non-exclusive. Recently it
was estimated that MDT holds a 15.1% stake in CardioMEMS, alongside other
major shareholders including Arcapita Ventures Limited I,
Foundation Medical, company management and entities associated with
Boston Millennia Partners.
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