Renevo makes second attempt at floatation
The improving fortunes of the UK biotech industry were highlighted today when Renovo launched its second attempt to list on the stock market.
Renovo, which develops drugs that prevent and reduce scarring on the skin and inside the body, aims to raise £40m (€58m) by offering shares to institutional investors.
A successful listing would value the Manchester-based company at between £129m (€190m) and £139m (€201m), with the proceeds used to fund the development of its Juvista and Zesteem drugs.
Renovo – founded by Professor Mark Ferguson and Dr Sharon O’Kane in 2000 – put plans for a flotation last May on ice due to tough market conditions.
But interest in UK biotech firms has increased over the past year – headlined by the agreement of Vectura and Arakis to let Swiss drug maker Novartis develop and commercialise its AD237 treatment for “smoker’s lung”.
That deal could be worth as much as $375m ( €290m) and was reported to be one of the biggest ever in the UK biotech sector.
Further interest was generated by the revelation that Slough-based biotech firm Piramed will receive $230m (€193m) from a research and development alliance with US rival Genentech regarding a new class of cancer drugs.
AstraZeneca – the UK’s second largest pharmaceuticals firm – has also tapped the biotech sector to plug gaps in its drugs pipeline, signing three deals including one worth £195m (€283m) to license septic shock treatment CytoFab from Protherics.
Prof Ferguson, chief executive of Renovo, said the flotation represented an “important milestone” for the company.
“We are at a perfect stage in our development to take the step up to being a listed company and then to secure a partnership deal for the commercialisation of Juvista,” he said.
“We believe that Juvista and Zesteem will make a real difference in preventing and reducing scarring and accelerating healing respectively.
“We are confident these products will find widespread use amongst surgeons and doctors, and significantly benefit millions of patients worldwide following surgery, accidents and trauma.”
It is estimated that the market for preventing and reducing scarring in the skin is worth more than $4bn (€3.32bn) annually in the United States alone.
Juvista is expected to enter phase III trials in the UK and US in 2007, while Zesteem will begin its final assessment this year. Renovo also has two more drugs – Juvidex and Prevascar – at an earlier stage of development.
Shares in the company are expected to be offered to investors within a range of 79p and 89p.
Management and current shareholders, which include venture capitalists JP Morgan Partners and Care Capital, will not sell any of their shares in the flotation and have agreed not to do so for at least six months.
