IPO Watch: CombinatoRx, Incorporated And The Biological Two-Step
10/19/2005 5:12:59 PM
CombinatoRx finds itself in that familiar rock/hard-place difficulty. The rock is a lousy IPO market, which is very grudging in its valuations of development-stage biotechs, and the hard place is not having any money. The premise behind CombinatoRx is that biological pathways are often double. Thus, a drug may be efficacious against one pathway, only to have a disease make an end-run down a secondary route. To outsmart the disease, CombinatoRx screens a library of 2,000 already-approved drugs to see if a combination of any two could plausibly treat an illness even if neither one of them is currently used against the disease or if adding a second drug could increase the first drug’s effectiveness. We look at the pipeline of the company and its finances. In the last two months, most biotechs have chosen to postpone their offerings rather than reduce the IPO price down to fire-sale levels. Will CombinatoRX face the same unpleasant, lesser-of-two-evils choice?