Mapi Pharma postpones and halves Nasdaq IPO

Mapi Pharma lowered the amount it will raise from $37 million to $20 million.

CORRECTION Drug developer Mapi Pharma, which was scheduled to complete a $37 million financing round at the end of last week, published a revised prospectus on Friday for raising only $20 million (including underwriters' options). The company value for the IPO was accordingly lowered to $120 million, after money.

Underwriter Aegis Capital is leading the IPO, with Chardan Capital as the secondary underwriter. The revised IPO is expected to take place this week, possibly in the next few days. Mapi reduced the offering because of market conditions and mostly because of Federal Reserve Chair Janet Yellen’s comment on valuations of biotech an social media companies.

The company, headed by CEO Ehud Marom, manufactures complicated-to-produce raw materials for generic drugs, and possesses a technological platform for delayed drug release. Mapi Pharma is seeking to use this platform to produce delayed release versions of Copaxone (made by Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA)) and a pain reliever.

The company is already in talks with some potential strategic partners, possibly with Teva itself, for the copaxone-like product. Mapi Pharma combines the risk of a startup with the limited dream of a generic company. The fact that the company is planning to locate at least some of its plants in Israel is only a minor element in the challenge it faces in its IPO. Even if Mapi Pharma raises only $20 million on Nasdaq, it will still be an impressive achievement.

The company had only $8 million in the bank at the end of March 2014.

Despite the prospectuses by biotech companies (not only Israeli ones) flooding Nasdaq , it appears that the enthusiasm for these offerings has subsided somewhat, compared with the first four months of 2014. Mapi Pharma was not the only one having a tough time last week; US company Atara also postponed its issue, and two other companies held their IPOs at the minimum price, and two more held their issue at below the minimum price. The above is a corrected version of an item that appeared on July 27, 2014

Published by Globes [online], Israel business news - - on July 28, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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