BG Medicine, a small Waltham company trying to develop novel medical tests, has postponed its initial public offering until next year after failing to excite enough investors to go public this month, analysts say.
The move is a rare miss in an otherwise banner year for Massachusetts IPOs. Nineteen companies in the state went public this year, more than double the tally last year and the most since the technology boom ended in 2000, according to Renaissance Capital's IPOhome.com. Those companies raised $1.6 billion, versus $1.5 billion raised in 2006 and the most since 2000.
But BG Medicine faces a slowing IPO market and investor nervousness about medical companies with unproven products. The company unveiled its plans to sell stock in August. But early this month, it slashed its initial price range to $8 to $10, down from $14 to $16. BG Medicine wasn't able to complete the offering before Friday, when the IPO market effectively shut down for the holidays.
"The IPO market became somewhat more selective toward the end of the year," said John E. Fitzgibbon Jr., a longtime IPO watcher and founder of IPOScoop.com. He expects the company to go public in mid-January.
BG Medicine has laid out its strategy in filings with the Securities and Exchange Commission. The seven-year-old company (originally Beyond Genomics Inc.) hopes to devise new diagnostic tools based on proteins or other molecules.
Specifically, it is developing a test for congestive heart failure, which prevents the heart from pumping enough blood to other parts of the body. The company said it plans to seek Food and Drug Administration approval to market the test in 2009. It's also working on tests to identify people at risk for other heart problems, including narrowing of arteries.
But because the company is still years away from marketing its first product, it needs capital. BG Medicine reported it lost $5.7 million on revenue of $6.6 million through the first nine months of this year. As of Sept. 30, it had $6 million in cash. It hopes to sell at least 4.5 million shares through the IPO and raise $35 million.
Flagship Ventures, a venture capital firm, owns nearly 58 percent of the company, which had 41 full-time employees on Sept. 30. Glide Europe Food & Agribusiness Fund BV owns 17 percent; Philips Electronics NV owns 8 percent.
Dr. Pieter Muntendam joined BG Medicine in late 2004 and became chief executive two years ago. The health industry veteran has cofounded at least two companies, Vitivity Inc., a unit of Millennium Pharmaceuticals, and ProMedix, a health management firm.
Todd Wallack can be reached at twallack@globe.com.
