Shield IPO called off
09.10.2015 - The US pricing controversy is reverberating halfway across the globe. Shield Therapeutics has taken its IPO plans off the table. Market conditions are too volatile, the company says.
UK-based specialty pharma company Shield Therapeutics is no longer pursuing a flotation on London Stock Exchange. Shield was scheduled to price the listing this week, but felt the market was not stable enough to go through with the IPO. “The response we have received from investors on both our business and our products has been very positive,” said Carl Sterritt, CEO of Shield Therapeutics. “But this recent dramatic increase in volatility, which has led to significantly negative market conditions for the biotech and pharma sector, currently does not allow us to launch the IPO and achieve a smooth transition to the public markets.”
In large part, the market’s volatility can be traced back to recent pricing discussions, which were triggered when Turing Pharmaceuticals bought the rights to Daraprim and immediately hiked the price up by more than 5,000%. The price increase of the drug often prescribed to AIDS and cancer patients, and the subsequent behaviour of CEO Shkreli caused an uproar in the media, which culminated in a tweet that rocked biotech stocks worldwide. Via Twitter, presidential candidate Hillary Clinton announced plans to "take on [...] price gouging like this in the specialty drug market”, causing biotech stocks to tumble on NASDAQ and elsewhere.
Shield, for one, does not believe it will get an adequate valuation. The company has decided to continue as a private company.