BIOTECH: Investors spurn Regulus IPO
LA JOLLA, Oct 09, 2012 (Menafn - North County Times - McClatchy-Tribune Information Services via COMTEX) --With demand for its shares far below expectations, Regulus Therapeutics Inc. endured a frosty reception with its initial public stock offering.
The IPO, launched Thursday, is "an outright disaster," the investment site Seeking Alpha said Monday. Regulus filed for the offering on Aug. 17.
Regulus had originally priced the offering at 10 to 12 a share, then lowered its offering at the last minute to 4 each. To compensate for the lower price, Regulus increased the number of shares offered from 4.54 million to 11.25 million.
Regulus shares closed Monday at 4.44, a gain of 24 cents for the day.
The lack of enthusiasm is also unwelcome news for the company's founders, Isis Pharmaceuticals Inc. of Carlsbad and Alnylam Pharmaceuticals Inc. of Cambridge, Mass. They contributed promising technology based on RNA interference to Regulus, and stand to profit if Regulus succeeds.
RNA interference and a related technology pioneered by Isis called antisense share the potential of stopping diseases at their genetic roots. Regulus is developing drugs that regulate gene expression from RNA snippets called microRNAs.
Regulus has scored a couple of significant drug development partnerships, such as one announced Aug. 14 with AstraZeneca. Regulus will get 28 million from the deal, including an up-front payment and an equity investment.
However, the deals aren't a guarantee that Regulus will succeed in developing any drugs, at least not anytime soon. Regulus isn't expected to file an application to begin a clinical trial of a drug until 2014.
"The fact that the company is not generating any revenues from actual products at this time, and the foreseeable future, is freaking out investors," Seeking Alpha wrote. "Furthermore, the fact that insiders accepted significant dilution in the offering is a red flag as well."
Call staff writer Bradley J. Fikes at 760-739-6641.
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