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WINSTON-SALEM - Targacept Inc. may need money, but many investment bankers and biotechnology executives statewide are concerned the Winston-Salem drug discovery firm may be picking the wrong time to issue publicly traded stock.
"We don't believe it's a good time for private companies to go out into the market particularly in these last few weeks," said Adnan Mjalli, chief executive officer of the High Point drug discovery firm TransTech Pharma Inc. 'Targacept is a very respectable company and they have a very good pipeline of drugs, but it's not a good market right now."
Mjalli echoes the concerns many in the North Carolina biotech and financial communities have about Targacept: The Winston-Salem company is a rose that may be trying to bloom too soon.
Last year's market gains combined with other signs of an improving economy have led more companies to undertake initial public stock offerings so far this year than in the past three years combined, according to NASDAQ data. But despite such hot activity for IPOs most of those companies are getting a cool reception from the market.
They're typically taking in less money than they anticipated for giving up control of their companies, and they're often watching those stock prices wither, according to Dr. Garheng Kong, an investment banker with Intersouth Partners in Durham.
Last week, all seven companies that went public nationwide had their stocks priced below their initial asking price. Not since August 2000 have so many companies priced so poorly, according to NASDAQ. Targacept officials declined comment this week, cit ing the Securities and Exchange Commis sion's so-called "quiet period," which prevents companies from mak ing public...