Neuren latest in line of lacklustre market debuts

NZ biotech company Neuren listed on the ASX today (ASX:NEU) in a less than stellar debut -- the company's shares opened at the issue price of AUD$0.40 but quickly lost ground. At press time, the shares were trading at around $0.37 after dropping as low as $0.335.

Neuren is the most recent of a string of lack-lustre floats in the biotech space, raising questions about the current market for IPOs.

Biotech analyst and co-editor of Bioshares, David Blake, said it was likely that biotechnology was just not particularly interesting to investors right now.

"There is no good stock story at the moment to attract widespread interest," he said. "But something else will come along to boost investor interest again."

Another reason for the slow start to trading in Neuren may have been that investor demand was largely satisfied by the IPO, Blake said. "I wouldn't be surprised if it took Neuren some time to get some traction on the market, as Alchemia and Pharmaxis did," he said.

As a company, however, Neuren shows plenty of promise. With a fat pipeline of potential products focusing on neuroprotection and metabolism, the company expects to have one product in Phase II trials and a second in Phase I trials within 12 months.

Neuren's most advanced product, Glypromate, is a tripeptide derived from IGF-1 which has shown much promise as a neuroprotective agent capable of preventing cell death as a result of acute brain injury. Phase I trials have showed that the drug is safe and well tolerated, and a multicentre Phase II trial, expected to be conducted in Australasia and the US, is in the planning stages.

Following close on its heels is Neuren's second lead candidate, NNZ-2256, an analogue of Glypromate, is likely to commence Phase I clinical trials this year for the treatment of traumatic brain injury, with the support of the US Walter Reed Army Institute of Research.

"They like the compound and we're working toward moving forward with them as we speak," Neuren CEO David Clarke said today.

Other compounds in the Neuren portfolio are being evaluated for their use in combatting the ageing process, neuron repair and regeneration. Another set of compounds based on growth hormone are being targeted at obesity and metabolic disorders, as well as cancer.

"We've been told it's one of the most extensive product pipelines in Australasia," Clarke said.

Despite its slow start on the ASX, Neuren has plenty of support behind it, with major pharmaceutical company Pfizer on the books as a major shareholder, as well as Macquarie Bank and a significant Malaysian investor. The company raised AUD$15 million in its IPO, giving it around two years worth of funds on its present course.

"If we get good results on our pipeline, we may need to go back to the market sooner," said Clarke. "But the key thing for us is to meet those milestones."