On Friday, Tranzyme Inc. became the fifth venture-backed biotech to go public this year–but also the fifth such company to see its offering price slashed ahead of its offering due to weakening demand.
Last month, Tranzyme’s underwriters projected the company would sell 5 million at $11 to $13 apiece, but they instead knocked down the price to just $4 to get investors interested, while lifting the number of shares offered to 13.5 million. This had the effect of giving Tranzyme the funding it needed to support clinical trials, but the move also significantly diluted the venture investors’ stakes.
Tranzyme’s three largest shareholders, HIG Ventures, Quaker BioVentures and Thomas McNerney & Partners, were expecting to own 14.1% of the company after the offering, but will now hold 9.2%.
To read the full, original article click on this link: Biotech IPOs Continue Bleeding Money - Venture Capital Dispatch - WSJ
Author: Scott Austin
