* CEO says Convergence could raise 50-100 million pounds
* Follows success for pain drug in mid-stage trial
* UK biotech sector boosted by Circassia IPO in March
* Biotech support firm Abzena also announces plan to float
By Ben Hirschler
LONDON, June 16 Convergence Pharmaceuticals, a
specialist pain drug company spun off from GlaxoSmithKline
, is preparing for a possible stock market listing as
British biotech companies enjoy a revival of interest from
The European sector has been slow to catch up with its U.S.
peers, which have seen a renaissance in the past two years, but
since allergy drug developer Circassia raised 200
million pounds ($335 million) in March - the biggest London
market debut in years for a biotech company -
the wider industry's fortunes have turned.
Now Convergence Pharmaceuticals, which was created in 2010
following GSK's decision to exit certain areas of neuroscience,
says it could raise between 50 million and 100 million pounds in
another substantial initial public offering (IPO).
Chief Executive Clive Dix said on Monday that listings in
London and New York were under consideration, with a potential
flotation most likely to take place early next year as the group
readies its most advanced drug for final-stage clinical testing.
"We are now starting to talk to advisers about the state of
the FTSE and Nasdaq markets for biotech and are considering
seriously floating the company," Dix said in an interview. "We'd
probably be looking to go out early next year."
A further funding round from venture capital investors, who
have already put up $35.4 million, is a fallback option if the
window for biotech IPO fund-raisings closes before then, he
Convergence's backers include Apposite Capital, New Leaf and
SV Life Sciences. GSK also retains an 18 percent stake in
The company has been encouraged to look at an IPO following
successful mid-stage clinical trial results showing its
experimental drug CNV1014802 reduced pain by 55 percent in
patients with trigeminal neuralgia (TGN), a rare and severe form
of facial pain.
Convergence received orphan-drug designation from the U.S.
Food and Drug Administration last year for the drug in TGN and
Dix believes it has potential in several other conditions as
well. The firm also has several other products in development.
Dix, an industry veteran, said the success of Circassia had
been a spur to emerging healthcare companies and their backers
Firms raising money in Europe rely more heavily on
generalist and small-cap investment funds - many of which have
little appetite for early-stage biotech businesses - making
Europe a tougher place to raise funds than the United States,
where an experienced pool of specialised funds understand the
sector's complexities and long development timelines.
"(Circassia) has given us more confidence and I think it has
given the sector more confidence too," Dix said. "I think we are
seeing a proper recovery now. This isn't just hype. There are
lots of very good small company start-ups and spin-outs."
Separately, another British biotech business called Abzena,
which provides services and technologies to biotechnology and
pharmaceutical companies, said on Monday it intended to launch
an IPO on London's AIM market, formerly the Alternative
Investment Market. Cenkos is acting as its adviser and broker.
Abzena's investors include Imperial Innovations,
which has a stake of 26.2 percent worth 11.1 million pounds at
the end of January, making the group worth 42.4 million at that
In another fillip for European biotech investors, Actelion
said its experimental heart and lung drug Selexipag met its
primary goal in a late-stage study, boosting its shares more
than 14 percent.
($1 = 0.5956 British Pounds)
(Editing by Sophie Walker)