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Drug Company Zogenix Plans Initial Public offering

From Associated Press (September 7, 2010)

INDIANAPOLIS -- Specialty pharmaceutical company Zogenix Inc. has again filed for an initial public offering of common stock, more than two years after it first announced plans to go public.

The San Diego company looks to raise up to $90 million, according to a registration statement filed with the Securities and Exchange Commission. The company said the estimated value of the offering isn’t final and was calculated to determined the registration fee.

The number of shares to be offered and the price range for the offering also have not been determined.

Zogenix specializes in developing products for the treatment of central nervous system disorders and pain. It launched the migraine treatment Sumavel DosePro in January. It also has ZX002, a potential treatment for moderate-to-severe chronic pain, in late-stage clinical testing.

It plans to use net proceeds from the offering to fund the ongoing commercialization of Sumavel DosePro and the development of ZX002, among other uses.

The company proposes the ticker symbol ‘ZGNX.’

Zogenix said it is in the early stages of commercialization and has incurred big losses since its inception. Its net loss for the first six months of 2010 was $49.3 million, with only $7.6 million in revenue.

The company filed plans for an IPO in 2008 and then withdrew them, said Scott Sweet, senior managing partner at IPOBoutique.

He said they may have a tough time drumming up interest. Regulatory approval delays and a lack of new blockbuster drugs have made investors reluctant to tie up their money in biotech stocks.

Biomedical or biotech IPOs, in particular, have struggled this year.

"Many have been postponed," Sweet said. "Many have had to cut their price in half and still have been postponed."


Posted: September 2010