Bay Area's SteadyMed Files for $55 Million IPO

Published: Feb 09, 2015

Bay Area's SteadyMed Files for $55 Million IPO
February 9, 2015
By Riley McDermid, Breaking News Sr. Editor

Pulmonary disease startup SteadyMed will raise up to $55 million for an initial public offering, the company said in a filing with the U.S. Securities and Exchange Commission Friday, as it attempts to bring its orphan drug therapy to a wider, more lucrative audience. No pricing terms were disclosed.

SteadyMed is developing a combination therapy and pump for pulmonary arterial hypertension (PAH), an orphan disease, via main candidate, Trevyent. Trevyent is a cocktail of treprostinil and SteadyMed’s PatchPump, a water-resistant and disposable drug administration technology, pre-filled with the liquid drug programmed to deliver the drug over 48 hours.

San Ramon, Calif.-based SteadyMed said it will list on the NASDAQ under the ticker STDY and initially filed confidentially for its IPO in mid-September. Wells Fargo Securities and RBC Capital Markets are the joint bookrunners on the deal.

SteadyMed was founded in 2005 and had a rocky 2014, entering a net loss of $19 million for the fiscal year ended Dec.31, 2014.

Still, SteadyMed’s debut happens at a time when the party may just be getting started, said longtime biotech exec and industry guru Stelios Papadopoulos. He released data in mid-January showing that 2014 had 22 percent more biotech IPOs than the infamous “bubble” year of 2000, a major metric market watchers will be eyeing as they head boisterously into a new boom year.

That data found that there were an “astonishing” 82 biotech IPOs in 2014, a massive increase from the 67 IPOs 2000. But deal size overall was smaller, with capital raised in 2014 clocking in at $5.5 billion, compared to $5.7 billion in 2000. Biogen Idec Chairman Papadopoulos has been collecting annual biotech IPO data by hand since 1979—a means of data collection most analysts find to be more meticulous and accurate than larger “number crunching” firms like Reuters or Bloomberg that sometimes miss deals.

“I consider his data the definitive source of biotech IPO information,” wrote ISI Evercore analyst Mark Schoenebaum in a note to investors that parsed the data. “I have found many other sources, including Bloomberg, to be inaccurate.”

The parade of initial public offerings from biotech firms last fall was a sign that investors are getting better at tolerating risk and finding new growth opportunities, venture capitalist Deepa Pakianathan, general partner Delphi Ventures, told BioSpace in October .

Data released by based by Thomson Reuters in the MoneyTreeReport from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA) found that $33 billion was invested through the first three quarters of 2014. Those numbers meant that total venture investing in 2014 has eclipsed total venture investing in all of 2013, which saw only $30 billion from VCs in four quarters.

Those numbers are good signs that IPOs this fall for companies like Juno Therapeutics , Kite Pharma, Inc. , Viking Therapeutics , Foamix Pharmaceuticals, Ltd. , ProQR Therapeutics B.V. (PRQR) and Forest Laboratories, Inc. who have all seen massive IPOs in the last six months.

“We haven’t seen an IPO window like this since the late nineties and early 2000s, which means companies are getting funded and venture capital firms can raise funds,” said Pakianathan. “It’s all part of the process of attracting money to the sector. The IPO market is largely being driven by public market investors interest in new growth opportunities and a higher risk tolerance.

Despite the rash of IPOs, some VCs are remaining cautious going as deeply into the sector as they did the quarter prior. Deals in biotech fell 6 percent in when compared to when compared to the previous quarter. Overall, the biotechnology industry captured the third largest total during the quarter with $1.1 billion going into 110 deals, down 43 percent in dollars invested and 10 percent in deals from the prior quarter.

Much of that movement can be put down to a flight from risk after choppy summer in the capital markets. But there is still plenty of room for innovation and incentive for new startups to aim for solid exits or IPOs in coming months, said Pakianathan.

“By definition, earlier stage companies are riskier investments. There were a lot of generalist funds that participated in IPO’s, in addition to the specialist funds,” said Pakianathan. “The good news for venture funds is that as companies grow and go public, they can return capital to their investors and they can continue to invest in newer startups. All of this positive activity in biotech keeps the innovation cycle going.”

BioSpace Temperature Poll
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