Epocrates’ strong IPO on the Nasdaq market validated the company’s strategy—that doctors will welcome technology if it helps their daily practice. The San Mateo, California based digital health firm made its stock market debut on February 2, raising $85.8 million through the sale of 5.4 million shares at $16 each. The offering raised 14 percent more than planned as shares were sold above the target range of $13 to $15.
More than a million doctors are registered as users on Epocrates’ online information network that allows doctors and healthcare professionals to access information about drugs, diseases, insurance, lab data, and patient data from their mobile devices at the point of care. The company offers several free apps besides its premium products and makes most of its revenue from pharmaceutical companies that want to capture those eyeballs and conduct market research.
Epocrates counts 45 percent of U.S. physicians as users of its network, according to a company filing. Revenues have been growing steadily. While the company posted a profit in 2009, net income dropped in 2010 due to expenses related to developing an electronic health record product and preparing to go public.
Epocrates partnered with pharma giant Pfizer in June to give healthcare providers mobile access to Pfizer medical information through its drug reference app for the iPhone. In November, it acquired software maker Modality for $13.8 million for its iPod Touch and iPhone applications and infrastructure.
Investors were bullish about the company. Shares started trading at $20 and ended the week at $26.51, soaring 66 percent above the offering price in the first three days on the market.
Six other life sciences companies attempted to go public during a busy week, but only four were successful. Tornier, a 70-year-old Dutch orthopedic medical device company, raised $166.3 million and began trading on Wednesday on the Nasdaq Global Select Market. Tornier priced 8.75 million shares at $19 a share, at the low end of its target range of $19 to $21. Shares fell at the start of trading and ended the week at $18.38, down 3.3 percent.
There was little investor love for three earlier stage biotechs with little to no revenue. All had to slash their prices to get their deals done. Pacira Pharmaceuticals sold 6 million shares at $7 per share to raise $42 million, one third less than it had hoped to get if the shares had been sold at the target range of $14 to 16. Pacira had $17 million in sales for the 12 months ending September 30, 2010. The company has developed an extended releast technology. It has two marketed products and a non-opoid postsurgical analgesic pending U.S. Food and Drug Administration approval, expected in July.
Cardiovascular diagnostics company BG Medicine priced its initial public offering of 5 million shares at $7 per share, half of its expected $13 to $15 range, to raise $35 million. Shares were up 13.6 percent in early trading.
Cancer drug developer Endocyte changed its IPO terms twice in two days to get out of the gate. The company, which is raising capital to fund a late stage trial of its ovarian cancer therapeutic and a companion imaging diagnostic tool, originally planned to raise $75 million by selling 5.4 million shares at $13 to $15. It did raised $75 million but it had to double the shares offered and more than halve the price to do so—selling 12.5 million shares at $6 per share. Burrill & Company, publisher of The Burrill Report, is an investor in Endocyte.
Two other companies have delayed their offerings. Dental implant maker BioHorizons postponed its IPO indefinitely and pain drug developer AcelRx delayed its IPO until the second week of February.
DEALS FOR THE WEEK ENDING FEBRUARY 4, 2011
| Global Venture Financings | |||
| Company | Location | Amount Raised (USD M) | Principal Activity |
| Spiracur | Sunnyvale, CA | 35.0 | Wound care |
| Glaukos | Laguna Hills, CA | 29.5 | Ophthalmic |
| Spine Wave | Shelton, CT | 17.5 | Spinal disorders |
| IntegenX | Pleasanton, CA | 15.6 | Sample preparation |
| Ocular Therapeutix | Bedford, MA | 14.0 | Ophthalmology |
| Rib-X Pharmaceuticals | New Haven, CT | 5.5 | Antibiotics |
| Computable Genomix | Memphis, TN | N/A | Pharmacogenetics |
| Entheogen | Cambridge, MA | N/A | Neurology |
| Cellnovo | London, UK | 48.4 | Diabetes |
| Scil Proteins | Halle, Germany | 33.1 | Cancer |
| Plasticell | London, UK | 3.2 | Stem cells |
| Oval Medical Technologies | Cambridge, UK | 1.7 | Drug delivery |
| Total Raised US | 117.1 | ||
| Total Raised Non-US | 86.4 | ||
| Grants | |||
| Company | Funding Agency | Amount Raised (USD M) | Principal Activity |
| Bohai Pharmaceuticals (China) | Chinese government | 0.1 | Traditional Chinese Medicine |
| PTC Therapeutics | Parent Project Muscular Dystrophy | 0.3 | Post-transcriptional control processes |
| Mobius Therapeutics | St Louis BioGenerator | N/A | Ophthalmic |
| SFC Fluidics | National Science Foundation | 0.6 | Microfluidics |
| Quantum Genomics (France) | National Research Agency | 1.9 | Hypertension |
| Digna Biotech (Spain) | European Union grant to AIPGENE consortium | 0.7 | Gene therapy |
| Total Grants | 3.6 | ||
| Public Financings | |||
| Company | Ticker | Amount Raised (USD M) |
Financing Type |
| Tornier (Netherlands) | TRNX | 166.3 | IPO |
| Pacira Pharmaceuticals | PCRX | 42.0 | IPO |
| BG Medicine | BGMD | 35.0 | IPO |
| Epocrates | EPOC | 85.8 | IPO |
| Endocyte | ECYT | 75.0 | IPO |
| Active Biotech (Sweden) | SSE:ACTI | 56.7 | PIPE |
| Helix BioMedix | OTC:HXBM | 0.6 | PIPE |
| Radient Pharmaeuticals | RPC | 7.5 | PIPE |
| Athersys | ATHX | 13.1 | PIPE-DPO |
| Living Cell Technologies (New Zealand) | ASX:LCT | 1.7 | PIPE |
| Weikang Bio-Technology (China) | OTC:WKBT | 5.0 | PIPE |
| Angel Biotechnology (UK) | LSE:ABH | 3.1 | Placing |
| Avacta Group (UK) | LSE:AVCT | 3.1 | Placing |
| Oxford BioMedica (UK) | LSE:OXB | 32.3 | Placing |
| Ligand Pharmaceuticals | LGND | 20.0 | Debt |
| Savient Pharmaceuticals | SVNT | 200.0 | Debt |
| Valeant Pharmaceuticals (Canada) | VRX | 650.0 | Debt |
| Oncolytics Biotech (Canada) | TSX:ONC | 6.8 | Warrant exercise |
| Helix BioMedix | OTC:HXBM | 2.3 | Warrant exercise |
| ArtVentive Medical Group | OTC:AVTD | 10.0 | Committed financing agreement |
| Total Public Financings-US | 491.3 | ||
| Total Public Financings-Non-US | 925 | ||
| M&A | |||
| Acquirer | Target | Deal Value (USD M) |
Focus |
| Valeant Pharmaceuticals (Canada) | PharmaSwiss (Switzerland) | 481.0 | Generics |
| Biovail/Valeant (Canada) | GlaxoSmithKline's Zovirax (UK) | 300.0 | Pharmaceuticals |
| Vale (Brazil) | Biopalma (Brazil) | 173.5 | Industrial/Ag |
| Medline Industries | CareFusion | 130.0 | Surgical products |
| Alexion Pharmaceuticals | Taligen Therapeutics | 111.0 | Inflammation |
| Kensey Nash | Nerites Corporation | 20.0 | Surgical products |
| Trinity Biotech (Ireland) | Phoenix Biotech | 2.5 | Diagnostics |
| Cynosure | Eleme Medical | 2.5 | Medical devices |
| Nycomed (Switzerland) | Laboratorios Farmacol (Colombia) | N/A | Pharmaceuticals |
| IntegenX | GenVault | N/A | Genomic tools |
| International Chemicals Investors Group | Genzyme | N/A | Pharmaceuticals |
| Intrexon | Agarigen | N/A | Agbio |
| OPKO Health | CURNA | N/A | Tools/Technology |
| Alliances | |||
| Company/Licenser | Company/Licensee | Deal Value (USD M) |
Focus |
| MAP Pharmaceuticals | Allergan | 157.0 | Co-promotion of migrain drug |
| Hansen Medical | Phillips Healthcare (Netherlands) | 107.0 | Medical technology license |
| Marina Biotech | Debiopharm (Switzerland) | 25.0 | Cancer drug collaboration |
| Merck KGaA (Germany) | Apeiron Biologics (Austria) | N/A | Cancer drug license |
| Bristol-Myers Squibb | Paladin Labs (Canada) | N/A | Marketing license for pediatrics |
| HealthCore (Wellpoint) | AstraZeneca (UK) | N/A | comparative effectiveness collaboration |
| START | Cenova Ventures (China) | N/A | Clinical trials joint venture |
| Partek | Life Technologies | N/A | Gene sequencing partnership |
| Pfizer Japan | Takeda Pharmaceutical (Japan) | N/A | Co-promotion agreement in Japan in RA |
| Tacere Therapeutics | Oncolys BioPharma (Japan) | N/A | Infectious therapeutic rights |
February 04, 2011
http://www.burrillreport.com/article-epocrates%e2%80%99_ipo_has_strong_market_reception.html