A Few Raindrops Amid Texas Biotech IPO Drought

5/30/14Follow @angelashah

As the proverb goes: Ask, and ye shall receive.

Recently, I wrote about ZS Pharma’s bid to go public. The suburban Fort Worth company is developing a drug to treat chronic kidney disease and hopes Wall Street cash can propel it through late-stage clinical trials. (Terms have not yet been set.) Still, ZS’s SEC filing made me wonder when was the last Texas biotech company to file an IPO.

By what I could find, the last Texas biotech IPOs took place 14 years ago when Luminex (NASDAQ: LMNX), Tanox (NASDAQ: TNOX), Lexicon Pharmaceuticals (NASDAQ: LXRX), Pain Therapeutics (NASDAQ: PTIE), and Introgen Therapeutics went public in deals that ranged from $36.8 million (Introgen) to $244 million (Tanox).

The Texas pipeline is nowhere as robust as that on the national level. As of August of last year, about 30 life sciences companies had gone public, more than double the annual rate of such IPOs since 2008.

But I had a feeling I might be missing at least an IPO or two, and asked Xconomy readers for help. They obliged.

Caleb Smith, vice president at Salem Partners in Los Angeles, pointed out that I had omitted the $135 million IPO of Adams Respiratory Therapeutics in 2005. The company, which was headquartered in New Jersey, was started in Fort Worth, and in 2008 sold to London-based Reckitt Bensicker Group for a reported $2.3 billion.

In the original article, I included Pernix (NASDAQ: PNX), a maker of children’s medication based in The Woodlands, TX, that went public in 2010—but through a reverse merger, a less traditional approach to being listed.

Imran Alibhai, vice president at Texas BioAlliance in Houston, recalled that another Texas biotech that took the same approach was PharmaFrontiers, now known as Opexa. The firm, also based in The Woodlands, TX, is developing a treatment for multiple sclerosis and went public in a reverse merger a decade ago.

And Atul Varadhachary, managing partner of Houston’s Fannin Innovation Studio, e-mailed me that another asterisk should be placed by Agennix, which was developing a treatment for non-small cell lung cancer. In November 2009, the Houston-based firm went public on the Frankfurt stock exchange, following a merger earlier that year with GPC Biotech of Germany.

Varadhachary adds that, unfortunately, a pivotal Phase 3 study for the drug failed three years later, and both Agennix’s clinical program and the Houston office were shut down by the end of 2012. “Agennix still trades for now on the DAX although it will be liquidated later this month,” he added. “Could have been a nice Houston success!”

Angela Shah is the editor of Xconomy Texas. She can be reached at ashah@xconomy.com or (214) 793-5763. Follow @angelashah

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