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April 16, 2004 — Largely unbeknownst to the nanotech community, a company commercializing patented magnetic nanoparticles went public this morning on the Nasdaq exchange after twice reducing its opening price estimate earlier this week. Analysts say the lack of attention and the lower price suggest a healthy skepticism among investors.
Immunicon Corp. (Nasdaq: IMMC) of Huntington Valley, Pa., priced 6 million shares at $8 apiece yesterday. Trading began around 11 a.m. today, after which the stock quickly scrambled above $9 and hit a $10 high before settling down.
The company uses patented magnetic nanoparticles, called ferrofluids, in systems to collect and analyze rare cells from blood. Its initial products focus on cancer diagnostics.
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On Wednesday, the initial price was lowered from a range of $12 to $14 to a new range of $9 to $11 before being cut yesterday to $8, according to SEC filings.
“This is normal procedure that the investment banks [would lower the price],” said Thiemo Lang, a portfolio manager with mutual fund firm Activest of Munich, Germany. “The clients say, ‘yes it’s interesting, but $13 is too much for us.'”
It’s also a good sign of a sane environment, maintains Lang, that a nano company was subject to the same pricing pressures facing other IPOs. Lang created a nanotechnology-focused mutual fund in 2002. “If it were the other way around, you would really have to worry.”
Immunicon’s products could cut the time and sample size required for cancer diagnostics, said Juan Sanchez, a medical doctor and nanobiotechnology analyst at Punk Ziegel & Co. The technology could also be used for follow-up evaluations to determine the effectiveness of treatment.
Its systems use the magnetic nanoparticles to separate cells based on the antigens on the surface of the cells. The company has done little to publicly capitalize on the fact that it uses nanoparticles, instead defining itself as a biotechnology company.
“You have to consider that this is a basic use of the properties at the nanoscale,” Sanchez said. “The importance of Immunicon’s technology is the architecture that they use. It’s the system, not the nanotechnology.”
And that, said Lang, is one reason this is unlikely to be regarded as a seminal nanotechnology IPO. But if their patented nanoparticles are considered an important enough part of the company, “I think it will be a very small step going forward that the stock market will start to look at them as a nanotech company.”
UBS Securities LLC is leading the deal. Additional underwriters include SG Cowen, Legg Mason Wood Walker and Adams Harkness & Hill. Immunicon was originally backed by more than $86 million in venture funding, according to the Money Tree Survey by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association. Backers included Johnson & Johnson Development Corp. and nearly a dozen private equity firms.
Just before 2 p.m., the stock was at $9.36 on volume of almost 1.5 million shares. Executives at Immunicon could not be reached for comment.