Market Overview

Axovant Sciences' IPO Sparks Comment On 'Biotech Bubble'

Axovant Sciences' IPO Sparks Comment On 'Biotech Bubble'

Axovant Sciences Ltd (NYSE: AXON) nearly doubled during its first few hours of trading Thursday, stirring comments about a biotech bubble.

The company acquired its single product, a prospective treatment for Alzheimer's disease, for $5 million from GlaxoSmithKline plc (ADR) (NYSE: GSK) in December, and priced its initial public offering at $15 a share on Wednesday.

Axovant traded recently at $29.07.

Industry Buzz

"The fact that someone can make something of this size out of virtually nothing should be of concern to everyone in the industry," John Carroll, editor of the industry news site FierceBiotech wrote. "Magical thinking will take you just so far."

"There is no doubt that biotech is the one area of the IPO market where there are signs it looks like the dotcom bubble," Renaissance Capital's Kathleen Smith told the Financial Times.

Related Link: Analyst Knocks High Profile Biotech Merger Battle Opportunities Elsewhere

A Quick Look At Axovant

Axovant is headed by 29-year-old Vivek Ramaswamy, who has a biology degree from Harvard College and graduated from Yale Law School.

Until May of last year, Ramaswamy, whose mother and brother work for Axovant, was a member of the investment team at hedge fund sponsor QVT Financial LP, with a $1.8 billion portfolio.

Axovant: Looking Ahead

Axovant hopes to launch a Phase III study of its prospective Alzheimer's treatment in the fourth quarter.

"In the long-term, we intend to develop a pipeline of product candidates to comprehensively address the components of dementia," Axovant said in its prospectus.

Image Credit: Public Domain


Related Articles (GSK + AXON)

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