Circassia to test U.K. investors' appetite for risk with a $285M IPO

European financial markets have largely missed out on the biotech IPO boom, with the few local companies to go public traveling to the U.S. to file their papers. Now British vaccine developer Circassia is to test investor appetite in the United Kingdom with a bumper $285 million IPO.

If Circassia hits its targets, the IPO will dwarf last year's largest IPOs, among which the $167 million raised by Ophthotech ($OPHT) stood out as a big offering. While other European biotechs, most recently Netherlands-based 2013 Fierce 15 honoree uniQure, have gone public in the red-hot U.S. IPO market, Circassia is listing on the London Stock Exchange (LSE). Unlike the NASDAQ and its U.S. peers, LSE has seen few biotech IPOs amid fears investors lack the appetite for the risks of drug development.

The lingering concerns date back to the late 1990s when big, high-profile flops burnt investors. "There has been too much focus on the failures and not enough on some great success stories," Circassia co-founder and CEO Steven Harris told the Financial Times. Harris sees this changing now. "There is a willingness to invest in the right stories where trials are well advanced and the risk is less," he said.

Circassia co-founder and CEO Steven Harris

Circassia is talking up its late-stage pipeline to allay investor worries. The Imperial College London spin-out has put four products through Phase II and is about to take its lead candidate, a cat allergy vaccine, into Phase III. Harris told Bloomberg he plans to set up a direct sales force in the U.S. and key European markets. The team will be tasked with claiming a piece of the $6.8 billion allergy-combating prescription antihistamines market for Circassia's T-cell vaccines.

Across the Atlantic, Circassia's vaccine-developing peer Genocea Biosciences ($GNCA) became the latest biotech to list on the NASDAQ this week. The 2008 Fierce 15 company priced at the low end of its range, raising $66 million in the process. On the first day of trading shares slipped 8% to $11. Genocea is still a long way from commercialization, with its lead genital herpes vaccine expected to enter Phase II later this year.

- check out the FT article (sub. req.)
- here's Bloomberg's piece
- read Xconomy's take on Genocea
- get more on uniQure and Genocea from FierceBiotech

Special Reports: FierceBiotech's 2013 Fierce 15 - UniQure | FierceBiotech's 2008 Fierce 15 - Genocea Biosciences | Top 5 VC Deals, H1 2011 - Circassia