Biolex is latest with plans to sell stock

IPOs in works show medical-related companies are maturing

For two years, the Triangle's drug industry took a sabbatical from Wall Street.

Now it's heading back.

In just over two weeks, two companies have filed with U.S. regulators to sell stock to the public. And if either is successful, it will mark the region's first medical-related IPO since Icagen of Durham went public in February 2005.

Biolex of Pittsboro on Tuesday submitted plans with the Securities and Exchange Commission to raise as much as $70 million. Its action follows Talecris Biotherapeutics, based in Research Triangle Park, which filed July 27 to raise as much as $1 billion.

Neither has said how many shares it will sell or at what price, meaning their windfalls could be far more or less.

But their turn to the public stock markets shows how the region's biotechnology and pharmaceutical sectors are maturing. Their listings would enrich local investors and executives and bring new attention that public company headquarters command.

The question is how Biolex and Talecris will be received.

Biotechnology is "not a real hot sector right now," said Ben Holmes, head of Morningnotes.com, a Colorado firm that researches initial stock sales. Of 11 biotech companies that have gone public this year, five have logged first-day declines, according to Morningnotes.

WuXi Pharmatech, a China-based outsourcing company, had the biggest one-day gain, 40 percent, when it went public Thursday.The average return of all 11 companies in the sector with an IPO this year was 6.24 percent.

It will be at least several weeks before either local company is ready to sell shares. They first will court large, institutional investors to win support for their stock sales. Once demand is assessed, the share prices and other terms must be set. Additional filings must be made with the SEC.

By that time, the market could have a stronger appetite for biotech businesses.

"It's like a horse race," said John Fitzgibbon Jr., founder of IPOScoop.com in Edison, N.J. "You want to be all saddled up and in the starting gate so you're there when the bell rings."

Biolex is developing experimental medicines, including a treatment for hepatitis C, using genetically engineered Lemna, an aquatic plant known as duckweed.

Founded in 1997 to commercialize the technology from N.C. State University, the company has raised about $100 million in private venture capital from investors that include Intersouth Partners of Durham.

Biolex, which has 105 employees, lost $17.5 million last year on revenue of $5 million. It wants to list its stock on the Nasdaq under the symbol "BLEX" and intends to use the money it raises to fund operations as it develops treatments and seeks regulatory approvals.

Reached by phone Tuesday, Dale Sander, the chief financial officer, declined to comment on the IPO. Executives usually limit public statements while pursuing an IPO so as not to run afoul of SEC rules.

Few IPOs recently

The Triangle, across all sectors, has had a dearth of IPOs in recent years. Raleigh investment firm Triangle Capital raised $57.2 million in its February IPO -- the first stock sale of any company based in the area since insurer James River of Chapel Hill went public in August 2005.

But venture capital and other funding for early-stage companies has picked up since 2001, a sign that more IPOs could be on the way. Generally, after companies go through several stages of private funding, investors look to cash out their stakes. IPOs are among the ways they do so.

Consonus Technologies of Cary, which plans and builds corporate technology systems, in May filed to raise as much as $57.5 million from a share sale.

Motricity, a Durham company that develops mobile-phone content, and ChannelAdvisor, a Morrisville company that helps clients sell merchandise online, are being watched for IPOs. And Quintiles Transnational, a contract researcher that went private in 2003, is expected eventually to go public again.