(Adds analyst quote, updates share movement)
By C Nivedita
Oct 10 - Shares of BioNTech SE tumbled nearly 12% in afternoon trade, erasing all its gains from earlier on Thursday, another sign of weakness in the IPO market after the collapse of WeWork's market debut.
The shares backpedalled even though the German biotech firm downsized its initial public offering (IPO) and priced its stock below an earlier expected range on Wednesday.
A bout of stock market volatility fueled by worries over the potential economic impact of a trade war between the United States and China has led to IPO hopefuls delaying their listings or shares of those recently listed floundering.
Last week, WeWork owner The We Company said it was putting its IPO plans on hold, while entertainment and talent agency Endeavor Group Holdings pulled its listing last month.
Investors and experts tracking recent IPOs believe several companies thinking of going public in the next 12-18 months would be extremely wary of the recent backlash against loss-making firms and may end up staying private longer.
Almost half of all IPOs this year have been by biotechnology and other healthcare companies, and they account for most of the money-losing firms.
"Most of the peers have traded poorly and that weighs on investors' interest in new ones, if the existing ones are not trading well," said Kathleen Smith, Principal, Renaissance Capital, provider of institutional research and IPO ETFs.
BioNTech shares opened up 10% at $16.50 and rose as high as $16.69 in early trading on Nasdaq, giving the company a market valuation of $3.78 billion, before reversing course.
The company had originally aimed to sell 13.2 million American Depository Share (ADS) at between $18 and $20 apiece, but on Wednesday cut the deal size to 10 million ADS at $15 to $16 per share.
The final pricing of its public flotation at $15 per ADS helped BioNTech raise about $150 million.
The Mainz, Germany-based company specializes in messenger RNA (mRNA) molecules that prompt human cells to produce therapeutic proteins, triggering an immune response against cancer or infectious diseases.
BioNTech expects to use proceeds from the public share sale for general corporate purposes and to acquire or invest in complementary technologies and products.
J.P. Morgan, BofA Securities and UBS were the lead underwriters of the IPO. ($1 = 0.9076 euros) (Reporting by C Nivedita in Bengaluru; Editing by Shinjini Ganguli)