The partial listing of Swedish biotech company Biovitrum AB is expected to attract solid interest because the business has a revenue stream from existing products, analysts say.
Biovitrum's portfolio of six drugs includes money-spinner ReFacto, a treatment for the prevention of bleeding in patients suffering from Hemophilia A. The company also has 32 projects in clinical and preclinical development unlike some other biotechnology companies on the Stockholm stock exchange whose main activities involve research and development.
Investors have been wary of small biotech listings following the downturn in May on stock markets which saw some Swedish small-cap biotechnology companies' shares fall as much as 50%, with investors slow to come back.
Chris Redhead from Nomura Code Securities says: "For the moment there seems to be a move away from the high risk smaller stocks," adding the risk profile for Biovitrum is very different.
Biovitrum, which has been profitable since full-year 2005 on revenue of SEK937 million, will become the second largest biotechnology company on the Swedish stock market after U.K.-based AtraZeneca PLC, (AZN) also listed in Stockholm.
Weak investor interest in small-cap biotech companies has also be seen in other parts in Europe.
In Switzerland Basel-based biotechnology company MondoBIOTECH, whose IPO was expected mid-2006, recently postponed its plans. Peer Santhera, which said it was looking into launching an IPO in December last year, has so far also failed to finalize its plans.
Medium-sized well-established biotechs, with more near-term product launches in the pipeline, have seen increased investor interest.
Swiss Actelion (ATLN.EB), which has been on the stock market since 2000, has seen its share rise 52% year-to-date as its main drug Tracleer, a treatment for pulmonary arterial hypertension, is on it is way to become a blockbuster with annual sales of around $1 billion.
Speedel (SPPN.EB), another mid-sized Swiss pharmaceutical company, has risen 23% year-to-date. The company has developed a promising-looking treatment for high blood pressure, which will be sold by Novartis and is currently awaiting regulatory approval.
Biovitrum's chief executive officer Mats Pettersson confirms interest in his company's offering, which was launched on Monday.
"We're seeing interest from some very large investors as well as smaller and less known names," he said.
The company has offered to sell 7.7 million shares at between SEK90 and SEK105 a share, generating proceeds of between SEK693 million and SEK809 million.
This represents about 18% of the share capital in Biovitrum but further shares are expected to be sold from the two main shareholders, Nordic Capital Fond IV and MPM Capital in the years to come.
Pharma Business Intelligence
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