December 15, 2008, 9:53 am Two More Venture-Backed Companies Give Up on Waiting for IPOs Posted by Deal Journal
Two more venture-capital-backed companies that had been waiting for the public markets to clear up before their market debuts have stopped waiting.
venturewireEpocrates and Aegerion Pharmaceuticals on Friday withdrew SEC filings for planned initial public offerings, joining 36 other companies with venture-capital backing that have given up on their IPO dreams this year, VentureWire records show.
Epocrates, a San Mateo, Calif., provider of mobile- and Web-based information tools for physicians, filed in April to sell as much as $75 million in stock, although the company didn’t disclose how many shares it would offer or a prospective price range prior.
With a steady revenue stream and a profitable bottom line, the company isn’t under pressure to raise money from investors, said Philippe Chambon, managing director at New Leaf Venture Partners and an Epocrates board member. “It was not an offering to fund their operations,” he said. “This is an example where we really have the luxury of time.”
Investors left open the possibility of trying for an IPO when markets improve, though they declined to say how long that might take. “I would be very surprised if there’s an IPO market in ‘09,” Chambon said.
Sprout Capital, now managed by New Leaf, holds 17% of the company, according to the filing. Goldman Sachs Group owns 16%, InterWest Partners 12.7%, Draper Fisher Jurvetson 10.4%, Three Arch 10.3% and Bay City Capital 7.3%. Bay City, InterWest, Sprout and Three Arch planned to sell portions of their ownership in the offering.
Epocrates wasn’t available for comment.
For Aegerion Pharmaceuticals, a second initial public offering withdrawal may be the charm, according to Aegerion co-founder, Senior Vice President and Chief Financial Officer Will Lewis.
After posting better-than-expected data last month for its lead cardiovascular candidate, the opportunities for the company out of registration became much more compelling than pursuing the stalled public markets, he said. “We just want to be in a position where if we want to access that capital we can,” Lewis said of potential venture fund-raising, including new investors or partnerships. “The IPO market is just not available. That window is closed.”
The Bridgewater, N.J., company revisited plans for a public stock sale in November 2007, after previously filing for an IPO in March 2007 and subsequently pulling those first plans in June 2007 after pricing at $12 to $14 a share for 5 million shares.
Aegerion has received interest from potential new venture investors and plans to consider potential partnerships, Lewis said. The company plans to further consider its options after the required 30-day cooling off period, he said, which will positively position the company going into the J.P. Morgan health care conference next month.
The company’s main investors include Advent International, Alta Partners and Index Ventures, as well as Mitsubishi, MVM Life Science Partners and Red Abbey Venture Partners. Hercules Technology Growth Capital provided its debt funding.