Vital Therapies Postpones IPO as Biotech Sector Chills

Xconomy San Diego — 

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.