Supernus Aims For IPO Backed By Unusual Royalty Deal
This article was originally published in Start Up
CNS-focused Supernus Pharmaceuticals Inc. filed its intent to go public just before Christmas, making it the last biopharma to file in a year that ended with some cautious optimism about the IPO market. But Supernus stands apart from the year’s success stories in that most of its $157 million in financing in five years of existence has been non-dilutive. Thus, even if the company trims its offer price, investors are poised for a satisfying payoff.
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Plus news on recent financing activity by Alcresta, Alder Biopharmaceuticals, H.I.G Capital and Supernus Pharmaceuticals.
Continuing the trend from 2010, biopharma initial public offerings in 2011 are running into stubborn resistance from public investors, a frustrating development as markets otherwise soar to pre-recession levels. More often than not, drug companies are squeezing through the IPO window, which reopened in late 2009, by selling more shares at lower prices. The discounts mean companies raise less cash, and they strain beleaguered venture investors who must hold shares longer to reach an attractive exit price.
Shire's $2.6 billion all-cash acquisition of its Vyvanse partner New River Pharmaceuticals is no surprise. The original deal signed by the companies in 2005 engineered Shire's motivation to buy New River in the event Vyvanse became a success. New River's unusually consolidated ownership allowed it to remain independent until the eve of Vyvanse's approval and secure a top-drawer takeout valuation.