Vital Therapies Postpones IPO as Biotech Sector Chills

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Life sciences IPOs ran into market resistance for the second consecutive week.

San Diego-based Vital Therapies and Malvern, PA’s TetraLogic Pharmaceuticals both postponed their IPOs yesterday, according to the IPO research firm Renaissance Capital.

Travena, another Pennsylvania biotech, scrapped its IPO earlier in the week, and two other life science companies, Oxford Immunotec and Evogene, priced their IPO shares below expectations. Vital Therapies, which is developing an artificial liver for treating acute liver failure, wanted to raise $75 million by offering 4.4 million shares at $16 to $18 a share.

TetraLogic CEO J. Kevin Buchi told the Philadelphia Business Journal, “The market is just exhausted at this time.”

Demand for biotech IPO shares has grown especially weak among “generalist investors,” according to a San Diego lawyer who works on securities filings with local life sciences companies. Some biotech valuations “have gotten too far out there,” said the lawyer, who asked to go unnamed. Deal quality may have declined as well, he said.

Meanwhile, San Diego-based Biocept Laboratories, which develops and markets cancer diagnostic tests, set its IPO terms earlier this week. The company hopes to raise $20 million by offering 1.8 million shares at a price range of $10 to $12. At the midpoint of the proposed range, Biocept have a market value of $52 million. Biocept was founded in 1997 and plans to list on the NASDAQ under the symbol BIOC.

A total of 207 companies have gone public through IPOs so far this year, according to Renaissance Capital. Healthcare has been the single busiest sector in terms of IPO activity, according to Renaissance Capital, which has counted at least 50 life sciences deals so far.

Last week, San Diego-based Celladon, Monrovia, CA-based Xencor, and Palo Alto’s CardioDx all postponed their IPOs. Another California biotech, Relypsa, raised $75 million last week by offering 6.9 million shares at $11, below the company’s expected price.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.