Aug. 03--The shares of three Israeli biomedical companies that completed their IPOs last Wednesday night have traded down sharply since then. The drop in their share prices corresponds to a 3% dip in the Nasdaq biotechnology index on Thursday and Friday. The three companies compromised on the price and volume of their offerings, but nevertheless failed to maintain their market cap during the first two days of trading following the IPOs.
VBL Therapeutics(Nasdaq:VBLX), which develops drugs for infectious diseases and cancer, raised $65 million at $12 a share, compared with its target of $14 a share. The share price plunged 18% to $9.88 in the two days following the IPO. Macrocure Ltd.(Nasdaq:MCUR), which develops treatments for wounds, raised $53 million at $10 a share, compared with its original price of $13-15 a share. On the two subsequent days of trading, the share lost 25% of its value on the way down to $7.49 a share. In contrast to VBL, which went down for the first two days, Macrocure plummeted on Thursday, the first day following the IPO, but rose on Friday.
BioBlast Pharma Ltd.(Nasdaq:ORPN), a developer of drugs for rare diseases, compromised on the volume of its offering, not on the share price. It is no surprise to see its drop in trading following the IPO was the steepest of the three; the company share, issued at $11 a share, as sought by the company, now trades at $6.90, a 38% discount on the issue price.
The fall in the biotech index shows a negative attitude towards the entire market, not necessarily the Israeli shares in particular. The last week of July was one of the most turbulent in the volume of offerings on Nasdaq by biotech companies, which sought to raise capital before most of the market goes on vacation. The Nasdaq biotech index and the general market sentiment, however, were unfavorable to these companies, most of which failed to achieve the prices they wanted. As a result, two biomedical companies (including Israeli company Mapi-Pharma) announced the postponement of their IPOs.
IPOs are likely to resume in September if the market as a whole, including the biomed sector, reverts to a positive trend. Among the Israeli companies awaiting developments in the sector are ReWalk Robotics and Silenseed (both of which have already filed prospectuses), NeuroDerm, Foamix Pharmaceuticals, PolyPid,, and Mapi-Pharma.
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