The biotech IPO scene turns red hot
During all of last year there were only 11 biotech IPOs. But even that weak number looked pretty good compared to the barren years leading away from the 2008 financial crisis. In the last 6 months, though, the industry has seen a tremendous rebound, with almost twice that number of IPOs in half the time. And there's no sign that the great leap into the public market is waning, with 10 more IPOs in the queue.
Add it all up, and the biotechs that went public in the first half of the year raised close to $1.4 billion--which is particularly impressive if you consider that it represents a stream of cash that had all but dried up in recent years. New money flowing into biotech means more R&D projects, more researchers and more contracting. It's even more impressive once you look at the hot stocks like bluebird bio ($BLUE), which saw its shares soar 55% by the end of the first half, or Chimerix ($CMRX), up 73%.
Up until this year, investors had been steering clear of biotech IPOs, leery of the kind of extraordinary risks associated with drug development work, where an unexpected glitch can wipe out a company's value in minutes. But a sudden influx of IPOs doesn't mean that investors have thrown caution to the wind. For every hot stock like Chimerix, there was a company like Ambit ($AMBI), which couldn't come close to its initial price range. Investors are still being choosy about what they like, and the long-term investors that helped create these companies are often seen coming in to make sure the IPO gets off on the right foot.
Nine of these newly public biotech companies--Epizyme ($EPZM), bluebird, Portola, Ambit, KaloBios, Enanta, Tetraphase, Prosensa and PTC ($PTCT)--have been highlighted as Fierce 15 winners over the years. Some of them came out of the IPO chute running strong; others were weak. But the CEO of one of the strong ones gave FierceBiotech a hat tip just before they sounded the opening bell on their first day of trading.
"The Fierce 15 has been a great inspiration for us," Hans Schikan, the CEO of Prosensa, which was one of the biotechs to see its shares swell in value on the first day of trading, told me.
There's no telling how long this particular IPO window will remain open in the U.S. Just as investors cheer on big gains and sudden wealth, a growing number of analysts have begun to wonder out loud if the sudden spike will quickly collapse, leaving another group of biotech investors scrambling for the exits and vowing never to return. But for now, a group of biotechs are making hay while the sun shines.
Given the importance of the IPO market for raising funds and pushing new drug programs, we're going to keep the list updated. So if you're looking for a comprehensive source of information on these companies, check out our list, as well as the extensive archives we have on most of their histories. -- John Carroll, Editor-in-Chief. Follow me on Twitter and LinkedIn.