The Burrill Report


Biotech IPO fervor didn’t extend to Regado Biosciences this past week. The New Jersey-based company raised $43 million an initial public offering of 10.75 million shares at $4 per share, a deep discount to its original plan to raise $75 million by selling 5 million shares in the $14 to $16 per share target range.

The biotech will use the funds to support a late-stage study of its lead anticoagulant REG1, a two-component system comprising a Factor IXa inhibitor anticoagulant and its specific active control agent. REG1 is being studied in patients who suffer acute coronary events and must undergo open heart surgery.

One has to wonder why Regado struggled to go public at a time when investor enthusiasm for biotech IPO offerings is stronger than it has been in many years. Regado is the 32nd life sciences company to go public in the United States so far this year. As of the end of July, the 30 companies that had gone public so far were trading an average of 40 percent above their IPO price.

In the case of Regado, the company has a lead therapeutic that has shown positive data in mid-stage trials. But conducting a late-stage trial for acute coronary events will necessarily be a huge undertaking involving more than 1,000 patients and costing more than $100 million, according to some experts. Without a big corporate partner, the biotech needs a lot of money to see it through development.

One Regado IPO investor told me he considered Regado a good company with a good product, but not an exciting story. He said that right now investors are interested in stories with a lot of hope, like gene therapy and epigenetics. And that’s good because a lot of exciting research is coming out right now. But the fact that Regado doesn’t fit that bill probably hurt it when it went on the road to sell itself. According to its regulatory filing, insiders committed to $31.7 million of the offering.

But even though Regado had to deeply discount its offering to become a public company, it could quickly see its share price climb. Regado’s shares rose 20 percent in opening trading and were trading at $5 a share, up 25 percent at the close of the week.

It’s been less than a year since Regulus became a public company in early October 2012, also slashing its price and upping the number of shares to complete the offering. Still going public was a good thing. In July Regulus completed a follow-on offering at a share price 137.5 percent above its IPO price.




August 23, 2013
http://www.burrillreport.com/article-regado_biosciences_completes_downsized_ipo.html