Whereas secondary offerings (secondaries) have fueled much of the growth of the US biotech sector, European companies have consistently struggled to execute them. In the 1990s, a few UK companies, such as Oxford-based British Biotech and Oxford GlycoSystems, managed to raise $100-million-plus secondaries. Unfortunately, the demise of these companies discouraged institutional investors, and subsequent initial public offerings (IPOs), both in the UK and mainland Europe, tended to be tightly controlled events in which existing venture capital investors retained a large proportion of the shares, a situation that left potential institutional investors reticent to buy into European biotech offerings—either IPOs or secondaries.
What is remarkable about the Ablynx offering is not its size per se but its size relative to the volume of share dealing. In the US last year, companies like Dendreon, Vertex and Rockville, Maryland–based Human Genome Sciences, each completed multi-hundred-million-dollar secondary offerings. Seattle-headquartered Dendreon's secondary offering last May raised a whopping $200 million, but this represents just twice the value of Dendreon shares that change hands every day on NASDAQ. For Vertex, located in Cambridge, Massachusetts, its $477 million secondary offering in December works out at just 5 or 6 times its daily trading value. Ablynx's €50 million, on the other hand, represents around 250 times its trading value, because only around 25,000 Ablynx shares change hands each day. A similar multiplier applies to another Belgian company, Movetis, located in Antwerp, which completed its €85 million IPO last December. Possibly top of the heap in this regard, however, is London-based Proximagen, a neuroscience specialist, which raised £50 million in a secondary offering in June 2009 and yet trades less than 1,000 shares per day on the UK's Alternative Investment Market at a value of £1.00–1.25. Its ratio of money raised to daily trade value is >50,000!
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