Advanced BioHealing Sells for $750M on Eve of IPO

You sure don’t see this every day.

Advanced BioHealing announced plans for a $200 million IPO, priced its shares, heck, even declared a NYSE ticker symbol. Instead the Connecticut-based regenerative medicine company opted at the last second to sell to strategic acquirer UK-based Shire plc. The $750 million all-cash deal is a monster home run for its VC investors, including Canaan Partners, Wheatley Partners, Red Abbey Venture Partners, Channel Medical Partners and Safeguard Scientifics.

Canaan Partners, among Advanced BioHealing’s backers since 2006, was a 30%-plus shareholder in the company. The sale translated into a 15x return for its fully deployed $450 million Canaan Fund VII, unfortunately for Fund VIII investors, the only fund to jump into Advanced BioHealing.

Canaan guided its executive in residence, Kevin Rakin, into the CEO’s role at the company. Rakin will continue to lead Advanced BioHealing when it becomes part of Shire’s specialty pharmaceuticals division.

“It would have been a fantastic IPO,” said Canaan Partner Stephen Bloch, who also served as a board member for Advanced BioHealing. “It’s a huge win for us in a lot of ways.”

Bloch said Advanced BioHealing had eyed a listing for years, but market conditions were unfavorable for too long.

Advanced BioHealing’s last-second decision resulted in some likely losers among all the winners. Bank of America, Merrill Lynch and JPMorgan were underwriters on the offering; only BofA was listed as an advisor to Advanced Biohealing in its joint statement with Shire announcing the deal. Ouch.

If LinkedIn wasn’t already the IPO deal of the week, Advanced BioHealing’s decision to yank its offering from the market assures it is now.