German biotech firm Jerini's shares fall on IPO debut

Shares in German biotech firm Jerini fell as much as 6 per cent in their debut on Tuesday amid what traders said was a worsening climate for new listings in Frankfurt and scepticism about biotech offers.

The stock, the latest in a raft of Frankfurt debuts, opened at 3.10 euros, below the issue price of 3.20 euros, and was trading at 3.08 euros by 1156 GMT after earlier touching a low of 3.02 euros (1 euro = AUD$1.61).

Traders said demand for the stock was weak amid a worsening climate for IPOs in Germany with biotech firms, in particular, facing difficulty.

"Investors have become more cautious," said Florian Weber, a trader at DKM brokerage. MM Warburg equity strategist Carsten Clude added: "Many biotech firms post losses for years. Investors therefore need stamina."

Jerini plans to use the IPO proceeds to market its angioedema treatment icatibant, its main drug hope, which is in late-stage trials. Angioedema is a condition characterised by unpredictable attacks of swelling in various parts of the body.

The firm, founded in 1994, currently earns revenue from its drug development technology and is involved in discovery and development agreements with Baxter and Alcon. Since its creation it has raised 71 million euros in financing, mainly from venture capital firms including 3i, TVM and Health Cap.

Second German biotech IPO

Jerini is the second German biotech IPO this year after Paion floated in February. Paion's stock price has fallen 3 per cent since then, and traded 1.4 per cent lower on Tuesday at 7.84 euros.

Frankfurt has seen a rising number of IPOs in the past few weeks but investors are uncertain whether this trend will continue after the DAX index shed more than 5 per cent since early October. Several German IPOs have disappointed, such as fund-marketing firms HCI Capital and Lloyd Fonds, which from the outset have both traded below their issue price.