RPT-IPO VIEW-U.S. biotech IPOs dying on the vine

"No one is looking for another Phase 1 or Phase 2 stage company," he added. "And since no one is looking for those companies, there won't be any IPO's either."

BIOTECH'S COMEBACK

When the spigot does reopen, biotech companies with marketable therapies for hepatitis C, cancer and Alzheimer's therapies have the best prospects, analysts said.

"The nearer to market, the better, and the less capital required beyond an IPO the better," Schmidt said.

Demographic trends could improve biotech's longer-term prospects.

"Biotechs offer a glimmer of hope to deal with the array of illnesses our aging population will be facing," said Steve Brozak, an analyst with WBB Securities LLC.

Brozak predicts the next wave of IPOs will come from spinoffs of current biopharmaceutical companies that can tap into their parents' resources.

But even if the market for IPOs did reopen soon, biotech companies might have to wait longer than their peers.

"Institutions are now looking at buying assets, not concepts," said Tim Monfort, head of equity capital markets at investment bank Jefferies and Co Inc.

"Most biotechs are largely selling early-stage concepts," he said, making it likely they will not be appealing to investors for a while yet.

The greatest threat to the return of biotech IPOs is the nearly universally poor performance of biotech stocks, analysts said, despite biotech once being the hottest sector.

"There have been IPO windows, when investors got very bullish on biotech and there was a lot of irrational exuberance," said Guatam Jaggi, managing editor of consulting firm Ernst & Young's annual biotechnology report.

One such period was in 2000, after the human genome project was completed, and there were 22 biotech IPOs. But in 2001, the market cooled, and there was only one biotech deal.

"People realized it would take much longer to develop drugs than they thought and they rushed out of biotech," Jaggi said.

Only seven of the 61 biotech companies to have gone public since 2000 are currently trading above their IPO prices.

"Until people start making some money on these stocks, I don't see much interest in IPOs," Schmidt said. (Additional reporting by Toni Clarke in Boston, editing by Gerald E. McCormick and Maureen Bavdek)