French biotechs court U.S. investors amid wave of IPOs

Wed Jun 25, 2014 8:11am EDT

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PARIS (Reuters) - Eighteen French biotech firms, several newly listed on the Paris stock market, head to New York on Wednesday and Thursday to convince U.S. investors to help fund the next stages of their research and development.

Among them are companies specialized in therapeutic vaccines (Genticel (GTCL.PA)), cell-based immunotherapy (TxCell (TXCL.PA)), genetic disease diagnostics (Genomic Vision (GVI.PA)) and needle-free injections (Crossject (ALCJ.PA)).

The roadshow comes as France seems set for a record year in biotech stock market listings, with a dozen so far this year, up from seven in all of 2013.

The United States is home to the world's leading biotech companies, resulting in an experienced pool of specialized U.S. funds with a deep understanding of the sector's complexities and long development timelines.

By contrast, firms raising money in Europe rely more heavily on generalist and small-cap investment funds, many of which have traditionally had little appetite for early-stage biotech businesses, making Europe a tougher place to raise funds.

Analysts say having American investors holding shares in biotechs such as DBV Technologies (DBV.PA), Innate Pharma (IPH.PA) or Cellectis (ALCLS.PA) sends a positive signal that boosts confidence in the entire sector, though U.S. funds have largely stayed away from the recent wave of French initial public offerings (IPOs).

"We've done successful IPOs without the Americans, but if you want to go further they are a boost that gives confidence," Pierre-Olivier Goineau, head of trade group France Biotech, told Reuters earlier this month.

DBV Technologies, which listed on the Paris bourse in 2012, already has close to 40 percent of its free floating shares held by U.S. investors. The company develops desensitizing patches for patients with allergies to peanut, milk and dust mites.

Such patches have potential peak annual sales of $1 billion to $2 billion in 2020, estimates DBV Chief Executive Pierre-Henri Benhamou, who does not rule out teaming up with a company to sell its products in the United States from 2017 onwards.

Genomic Vision, for its part, has already found a U.S. partner to sell its diagnostic tests, which track the genetic mutations at the root of rare diseases and cancers.

The French firm has teamed up with U.S. market leader Quest Diagnostics (DGX.N), which owns 14.4 percent of its shares. Since late 2013, the firms have together sold a test for FSHD muscular dystrophy, a rare disease affecting the muscles of the face, shoulders and upper arms, in the United States.

Next year they now hope to start selling a new test detecting predispositions to breast and ovarian cancers, a product which Genomic Vision CEO Aaron Bensimon sees as a future blockbuster with potential annual sales of over $1 billion.

(Writing by Natalie Huet; Editing by Pravin Char)

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