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Recession fears halt IPO parade

February is normally a busy month for IPOs. But this year is shaping up as an exception.

In the first week of the month, not a single company went public on a major U.S. exchange. The slow spell follows an uneventful January, as recession fears and stock declines motivated would-be public companies to delay new offering plans.

In fact, companies that have scrapped IPO plans recently have outnumbered those filing for new offerings. Archemix, a developer of nucleic acid-based therapeutics, withdrew a planned $63 million IPO last week. The company had raised $135 million from such investors as Atlas Venture, Rho Capital, Highland Capital Partners and SV Life Sciences Advisors.

A week earlier, Biolex, a developer of monoclonal antibody-based treatments that had raised $100 million in venture financing from Intersouth Partners and others, withdrew its anticipated $70 million offering.

Meanwhile, few venture-backed companies are filing their IPO registrations on U.S. markets.

The last was BCD Semiconductor Manufacturing, a Shanghai-based maker of power management integrated circuits that filed to raise $76 million on Nasdaq.

Indeed, China-based companies appear to be faring better on the IPO market than their U.S. counterparts. The last VC-backed company to make a market debut was ATA, a Beijing-based computer testing provider that priced at the bottom of its projected range on Jan. 29. Prior to that, the last one was Silicon Valley-based business software provider NetSuite, which began trading in late December.

Faced with weakening demand from U.S. investors, pre-IPO companies are looking abroad for opportunities to tap public markets. The most dramatic example of late is NanoDynamics, a Buffalo, N.Y.-based producer of materials made using nanotechnology. The company plans to raise $100 million in an offering this week on the Dubai International Financial Exchange (DIFX). It will be the first U.S. company to list on the DIFX, according to Global Crown Capital, co-lead manager for the offering.

Global Crown said in a statement that it expect about half of the participants will be U.S. institutional investors and half will be regional Middle East institutions and accredited investors.

Venture-backed NanoDynamics initially filed in May to raise $106 million in an IPO on Nasdaq. But the company withdrew the offering in November. —Joanna Glasner