|Novo Nordisk CFO Jesper Brandgaard|
Chalk up another success for a drugmaker setting one of its units free. Novo Nordisk's ($NVO) newly public IT business got off to a flying start Friday, its first day on the Copenhagen stock market, with shares rising by as much as 44%, Reuters reports.
Investors quickly bid up shares in NNIT, which carried an offering price of 125 Danish kroner, or about $18--a figure analysts had called conservative. Up to 46% of NNIT will trade publicly if the underwriters exercise a 6% overallotment option.
The IPO is smaller than, say, Pfizer's ($PFE) big move to take its animal health unit Zoetis ($ZTS) public. But in spirit, it's the same sort of deal. Like Pfizer, Novo Nordisk is holding onto a big stake in the now independent company. The drugmaker will keep at least 25.5% of the company, with holding company Novo A/S buying another 25.5% shares at the offering price.
And like Pfizer with Zoetis, Novo's move to push NNIT out of the nest delivers some cash to deploy elsewhere. In Novo's case, that's more than $335 million.
The IT services company's IPO is the latest in a series of unit sales, spinoffs and trades in the pharma industry, as drugmakers work to focus tightly on the things they do well, and unload everything else. For example, Novartis ($NVS) and GlaxoSmithKline's ($GSK) triad of deals--which closed that week--gave Novartis a beefed-up oncology business and delivered even more vaccines heft to GSK. And it handed control of a consumer health joint venture to GSK, which has more depth and experience in the field than Novartis does.
But NNIT's stock offering likely won't be Big Pharma's last IPO. GSK said it's moving toward a public offering for ViiV Healthcare, its HIV-focused joint venture with Pfizer. The U.K.-based company expects to decide for sure by midyear. ViiV would be a much bigger moneymaker; with its £1.5 billion in 2014 sales, analysts see ViiV valued at £12 billion to £18 billion ($18 billion to $27 billion).
Novo Nordisk's experience could certainly be encouraging. "Amongst private investors in Denmark, more than 60,000 people wanted to buy shares," Novo CFO Jesper Brandgaard told the news service. "It's more than three times as much in both the number and the value bid for as in all previous IPOs in Denmark in the past five years. … We've also seen fantastic interest amongst institutional investors."
- read the Reuters news