Quark Pharmaceuticals Inc. has canceled its planning IPO on the Tel Aviv Stock Exchange (TASE), after the TASE demanded that the company cut the price of its offering. Quark planned to raise $40 million at a market cap of $200 million.
In 2007, Quark cancelled a planned IPO on Nasdaq, in which it hoped to raise $73 million at a market cap of $25-300 million. At the time, Quark president and CEO Dr. Daniel Zurr said that he did not want to compromise on the price. The company subsequently raised $27 million in a private placement and signed a strategic agreement with Novartis AG (NYSE:NVS; LSE: NOV; SWX: NOVZ). Quark already had a similar agreement with Pfizer Inc. (NYSE: PFE; LSE: PFZ).
The price Quark sought to raise on the TASE was, in fact, a compromise on the price it sought to raise on Nasdaq, especially given the company's subsequent progress. Nonetheless, the IPO was large in terms of the Israeli market - several times the size of IPOs in recent years.
The ambitious IPO faced a floundering market. Quark's management and its underwriters, led by Clal Finance Underwriting Ltd., sought an anchor investor to guarantee the bulk of the offering, but when they could not find one, they cancelled the IPO.
Quark will now consider its options, including another attempt to float on Nasdaq.
Quark was founded in 1994, and has raised $130 million to date. The company's original investors are seeking to sell their holdings. Oracle founder Larry Ellison is the company's largest shareholders. Other investors include US and Japanese private investment firms, such as SBI Investment Co. Ltd., and Japanese pharmaceutical companies Astellas Pharma Inc. (TSE: 4503) and Mitsubishi Tanabe Pharma Corporation (TSE: 4508).
Quark has a pioneering drug development platform based on the silent RNA (SiRNA) mechanism. The company has two drugs in Phase II (efficacy) clinical trials: PF655 for eye diseases age-related macular degeneration (AMD) and diabetic macular edema, an eye disease; and QPI-1002 for acute kidney injury and improved functioning of kidney transplants.
Published by Globes [online], Israel business news - www.globes-online.com - on May 12, 2011
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