February 15, 2011 / 5:27 PM / 9 years ago

Swiss-Italian biotech scraps IPO after partner walks away

* Philogen scraps IPO after Bayer ends drug partnership

* Would have been first European biotech IPO in 2011

ZURICH, Feb 15 (Reuters) - Swiss-Italian biotech group Philogen has pulled its plans to list on the Milan stock exchange after Bayer (BAYGn.DE) ended a partnership it had with the group.

The initial public offering would have been Europe’s first biotech listing this year and was an indication appetite for the sector was warming again as investors were willing to move into a riskier industry.

“Due to the unexpected Bayer Schering Pharma AG’s notice to terminate the licensing and development contracts regarding L19 product, Philogen S.p.A., in agreement with the global coordinator, has decided to withdraw the Initial Public Offering of its ordinary shares on the Mercato Telematico Azionario (MTA) of the Italian Stock Exchange,” the group said in a statement.

Philogen focuses on developing treatments for disorders related to angiogenesis, the growth of new blood vessels which can play a role in illnesses such as cancer, rheumatoid arthritis and age-related macular degeneration.

A spokesman for Bayer confirmed that it had informed Philogen about its decision to terminate the licensing agreement, but he declined to give any further details.

The group already put its plans to IPO on hold in 2008 because of the market conditions at the time.

Investor confidence in the industry seems to have been brightening recently as sector activity picked up in the United States and industry experts have said the financing environment has improved.

The sector went through a tough period when many biotechs ran into product development problems, prompting investors to withdraw their cash.

Philogen was looking to raise between 50.9 million and 65.3 million euros ($68.75 million - $88.19 million) in the IPO. [ID:nLDE7171XP]

Banca IMI and UBS were the global coordinators. ($1=.7404 Euro) (Reporting by Katie Reid; Editing by Jon Loades-Carter)

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