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French IPO market stirs as biotechs plan IPOs
Martin Arnold, FT Syndication Service
11/1/2005
PARIS: French investors had been waiting years for an initial public offering (IPO) by a pharmaceutical or biotechnology company then, like London buses, two arrived at once.
First Ipsen, a 76-year-old family controlled pharmaceuticals company, lately announced plans to float on the Paris Euronext stock exchange by the end of the year.
Lately, ExonHit, a biotechnology company founded in 1997, said it had filed documents with the regulator to float on Alternext, the new unregulated stock exchange launched in Paris this year.
The rush of activity partly reflects improving market conditions, as the CAC-40 index of French blue chips has gained more than 15 per cent this year, encouraging a string of companies from various sectors to float in Paris.
But for France's pharmaceutical and biotech companies, the latest double IPO launch could be an important step towards resuscitating investor interest in sectors that for years have suffered a dearth of new arrivals.
The last biotech IPO in France was Nicox, the research company specialising in nitric oxide technology, which floated in 1999.
Philippe Pouletty, head of the France Biotech industry association, said Exon it's announcement showed "there could be a lot of good biotech candidates for IPOs to come". He cited BMD and BioAlliance Pharma as two tempted to float if ExonHit was successful.
France is lagging behind with only four listed biotech groups, against 15 in Germany, 50 in the UK and 350 in the US. This has prompted calls for the government to grant more tax breaks for investments in small high-tech companies.
IDM, a French cancer drug specialist, abandoned a flotation in Paris last year, blaming a lack of local investor interest. Instead, it fled to the US by merging with a smaller US rival, gaining a Nasdaq listing, and moving its headquarters to San Diego.
The recent revival of activity in France reflects a growing trend in Europe, with a string of biotech companies going public this year, including Paion of Germany, Speedel and Arpida in Switzerland and Ardana in the UK.
However, there are still doubts over investor enthusiasm, as several of this year's European biotech IPOs have either been given disappointing valuations or seen their shares dip below their issue price.
Ipsen and Exonflit are floating for markedly different reasons. The former is an established pharmaceutical group raising money to expand in the US, while the latter is a more typical biotech float, seeking an exit route for its venture capital backers.
Analysts value Ipsen at between euro 1.5bn and euro 2.0bn ($1.8bn and UAW. It is 85 per cent owned by the family of Henri Beaufour, who founded it in 1929 as Laboratories Beaufour. The other 15 per cent is held by French investors and Germany's Schwabe family.
Ipsen's 2004 revenues of euro770m were split between last-growing specialist drugs, for cancer, hormonal and glandular problems, and more stable primary care products, for heart disease, digestive and cognitive disorders. It made profits of euro118m last year.
Goldman Sachs and BNP Paribas are managing the float, details of which have not been revealed. Jean-Luc Bélingard, chief executive, said it wanted to float in four to six weeks to seize a "window of opportunity of favourable market conditions".
One worry for Ipsen is an impending cut in French state reimbursements for some drugs. But Thierry Sancier at Goldman Sachs said Ipsen's only product likely to be hit by these changes was Ginkor, a vein tonic with sales of euro 60m.
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