Companies typically use their first-time listing on a stock exchange, known as the initial public offering (IPO), as a crucial one-time opportunity to generate cash. However, a run of disappointing biotech market debuts over the summer has caused many biotechnology companies to put their IPOs on hold or cancel them altogether.
"Only if companies are down-and-dirty desperate to get money and have very few other options are they opting for IPOs," says Steven Burrill, CEO of the life sciences merchant bank Burrill & Company. Moreover, companies that do go ahead with an IPO can create the perception that they are in dire straights, and that perception can, in turn, undercut the offering's ability to generate funds.
A window for biotech IPOs opened in late 2003, and many companies generated a substantial amount of cash to keep their operations humming along. That window has all but closed again, leaving some early-stage ...
