If a company is creating a "fountain of youth," it's likely to attract more than the usual amount of attention from investors.
So it's not surprising that Sirtris Pharmaceuticals Inc., a Cambridge biotech start-up developing antiaging drugs, enjoyed one of the state's best-performing initial public offerings last year.
What may be more striking is that four-year-old Sirtris, whose shares were up 29.9 percent as of March 31 from its offering price, agreed on April 22 — less than a year after going public — to be acquired for $720 million by British giant GlaxoSmithKline PLC.
"Our goal has always been to build a great company," says serial biotech entrepreneur Christoph Westphal, Sirtris's chief executive, who insists the new corporate parent will invest money and resources into drug discovery research and tests. "Now we're going to be building the company within a company."
The successful IPO of Sirtris last May 22 dramatically raised its profile in the pharmaceutical industry. But it was an article in the scientific journal Nature in November that caught the attention of GlaxoSmithKline researchers. By targeting the genes that control aging, it suggested, Sirtris's lead drug candidate, SRT501, could help deter aging-related diseases ranging from cancer to diabetes.
Sirtris wasn't the only start-up on the Globe 100 list of Massachusetts companies that went public in 2007 to be snapped up by a corporate buyer in 2008. Shares of the top performer, Lexington's BladeLogic Inc., which makes software for managing data centers, climbed 64.6 percent by the end of the first quarter. It agreed on March 17 to be purchased by BMC Software Inc. of Houston for $800 million.
Those two mirror-image IPO-to-acquisition tours de force bucked the generally downward trend of "exits" for venture-backed start-ups. While nearly two dozen Massachusetts companies went public last year, more than in the previous two years combined, the worsening economic downturn has more recently slowed IPO and merger activity to a trickle in the state and the nation.
Fewer companies were sold or taken public nationally in the first three months of 2008 than in any quarter in recent years. But the most promising companies are still making it through the window.
"It's back to basics," says Jonathan Karis, a partner at the Boston law firm Nixon Peabody LLP, who leads its venture capital and emerging companies practice group. "If you're a good company with good fundamentals, you can still go public and be acquired."
Twenty-three companies made up the IPO class of 2007 in Massachusetts, including Covidien Ltd. of Mansfield, a healthcare and medical-devices concern spun off from conglomerate Tyco International Ltd. on July 2. More than half the IPO class - 13 companies in all - were "under water" as of March 31, trading below their initial offering prices.
On the positive side of the Bay State ledger, several newly public companies joined Sirtris and BladeLogic with double-digit gains. Shares of Athenahealth Inc., a Watertown medical-software company led by President Bush's cousin Jonathan Bush, rose 31 percent. Shares of Monotype Imaging Holdings Inc., a Woburn company that sells digital text services, advanced 19.3 percent. And shares of Needham technology publisher TechTarget Inc. were up 12.4 percent. (Covidien's shares notched a 6.1 percent gain.)
Whether these performances can be matched in the coming year will hinge in part on whether emerging companies can take their shares public in 2008. There were only five IPOs of US high-tech and biotech companies in the first quarter, and none in New England, according to Thomson Reuters.
"The market for IPOs has struggled, and will continue to struggle, for the rest of the year," warns Karis.
Robert Weisman can be reached at firstname.lastname@example.org.