Despite postponing the IPO twice, Inotek Pharmaceuticals Corp (NASDAQ:ITEK) has gone public and raised $40 million in the process. The initial pricing was smaller than the original plan that expected to be 60% higher. The company sold 4.6 million shares and the initial listing was around $13-$15 per share. During the past month the sector has had its issues with IPO’s and has seen seven withdrawals. The company ended up pricing the initial offering at $6 per share but raised the total of shares for sale to 6.7 million. This compensated for the soft pricing in the total valuation.
Eye Drop Cure
Inotek Pharmaceuticals Corp (NASDAQ:ITEK) is developing a revolutionary product that treats glaucoma through eye drops. The sector has a seen a lack of enthusiasm in the IPO market recently. That is a sharp contrast to previous months where 27 Massachusetts life science companies have raised over $2 billion in investment dollars. In 2013 the majority of IPO’s were huge successes in the biotechnology industry but that did not help Inotek. The most recent release was Flex Pharma, which priced at 40% higher than expected. They lost about 9% when trading officially started. This was surprising as the biotech market has been hot lately.
Slow IPO market
Inotek now has a market cap valuation of $96 million. Insiders have committed to buying another $18 million of Inotek Pharmaceuticals Corp (NASDAQ:ITEK)’s stock and they are concurrently trying to raise $20 million in debt. The IPO market may be tired from the recent flow of biotech IPO’s. AT some point there becomes an issue of too many companies and not enough share buyers to go around. Biotech is experiencing a strong acceleration in the valuation of companies and that may be what is making investors shy away from smaller offerings such ads ITEX. The delays were due to the stocks inability to draw interest and that was reflected in the initial pricing. During trading the stock remained flat and there was not much fanfare involved.