Toward the end of 2001, the first new biotechnology filing on Nasdaq by NeoGenesis Pharmaceuticals (Cambridge, MA) and Biodelivery Science, and large secondary offerings from Biovail ($587.5 million; Toronto, ON, Canada) and ICOS ($313 million; Bothell, WA, USA) signaled the earliest crack in the shutters of the next window for initial public offerings (IPOs). Although most observers believe that the IPO window may not truly reopen until the middle of 2002 at the earliest, and possibly not for 18 months, companies, especially in Europe, are keen to ensure that they are prepared when the opportunity arises. Biotechnology IPOs had tailed off completely as the end of 2001 approached: all but $1 million of the paltry $313 million raised in IPOs globally came in the first half of the year.

In November, scheduled offerings by companies such as cancer drug developers, BioNumerik Pharmaceuticals (San Antonio, TX) and Xcyte Therapies (Seattle, WA), genomics discovery outfit Acadia Pharmaceuticals (San Diego, CA), and drug deliverer Acusphere (Cambridge, MA) were withdrawn or postponed, while Northwest Biotherapeutics (Bothell, WA), a cancer immunotherapy concern, added new underwriters and reduced the price of the offering it had filed originally back in August. Despite these indicators, however, mid-November also saw the first new biotech IPO filing since Zymogenetics (Seattle, WA) on September 10th, from proteomics-based discovery unit, NeoGenesis. Although the company had yet to set a price for the offering as Nature Biotechnology was going to press, many companies looking to float will be following Neogenesis' fate with great interest.

Tim Haines, CEO of structural biology specialists, Astex Technologies (Cambridge, UK), is one of those preparing for the next wave. “We are currently testing the market to assess precisely what we need to do pre-IPO and post-IPO to meet the expectations of the finance community.” He believes that in Europe especially a number of companies failed to maximize the opportunity last time round. “The European companies that did go out went out late: the US companies were better prepared.” He thinks that next time round investors will be looking not only for third party validation of a company's technology but also for indicators that the technology can actually derive developable lead compounds. Astex is not running short of cash, having raised around $43 million this year in private rounds, including £5.7 million ($8.2 million) from existing investors in December. However, Haines will be looking for an IPO that will take the company's valuation “north of £150 million” in order to stay on the institutional radar. Looking back to the disappointments that followed the public financing frenzy in 2000 (Nat. Biotechnol. 18, 922; 2000), Haines also recognizes that investors are likely to be more demanding next time around. “Many people got burned, especially in the genomics platform area.”

Zisi Fotev, vice president for business development at functional genomics and antisense specialist Atugen (Berlin, Germany), believes that the IPO market may open very soon. “The US market will open as early as summer 2002, with Europe following by the end of the year,” he says. The company is first looking for a €30–40 million mezzanine round before floating on a revitalized Neuer Markt in order to raise money to develop molecules against some of its validated therapeutic targets and to take those molecules through the clinic.