July 28-- Jul. 28 -- The Globes (Tel Aviv, Israel) issued a correction to the story headlined "Mapi Pharma postpones and halves Nasdaq IPO" (slugged: TL-Mapi-Pharma-postpones-and-halves-Nasdaq-IPO-0728), sent by McClatchy-Tribune Regional News on July 28. Please use the correct version of the story found below.
Mapi Pharma postpones and halves Nasdaq IPO
By Gali Weinreb
Globes, Tel Aviv, Israel
Drug developer Mapi Pharma, which was scheduled to complete a $37 million financing round at the end of last week, published a revised prospectus on Friday for raising only $20 million (including underwriters' options). The company value for the IPO was accordingly lowered to $120 million, after money.
Underwriter Aegis Capital is leading the IPO, with Chardan Capital as the secondary underwriter. The revised IPO is expected to take place this week, possibly in the next few days. Mapi reduced the offering because of market conditions and mostly because of Federal Reserve Chair Janet Yellen's comment on valuations of biotech an social media companies.
The need to reduce the volume and value of the offering is apparently mainly linked to the fact that the company is not in one of Wall Street's hot areas, and not necessarily because it is an Israeli company during a security-political crisis. Mapi Pharma is not bringing a dream about a new type of medicine to its offering, while on the other hand, it does not present a well-oiled generic operation with reliable revenue and profits.
The company, headed by CEO Ehud Marom, manufactures complicated-to-produce raw materials for generic drugs, and possesses a technological platform for delayed drug release. Mapi Pharma is seeking to use this platform to produce delayed release versions of Copaxone (made by Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA)) and a pain reliever.
The company is already in talks with some potential strategic partners, possibly with Teva itself, for the copaxone-like product. Mapi Pharma combines the risk of a startup with the limited dream of a generic company. The fact that the company is planning to locate at least some of its plants in Israel is only a minor element in the challenge it faces in its IPO. Even if Mapi Pharma raises only $20 million on Nasdaq, it will still be an impressive achievement.
The company had only $8 million in the bank at the end of March 2014.
Despite the prospectuses by biotech companies (not only Israeli ones) flooding Nasdaq , it appears that the enthusiasm for these offerings has subsided somewhat, compared with the first four months of 2014. Mapi Pharma was not the only one having a tough time last week; US company Atara also postponed its issue, and two other companies held their IPOs at the minimum price, and two more held their issue at below the minimum price.
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