European biotechs raised more than €1 billion ($1.1 billion) through IPOs in their home markets and overseas in the first 9 months of 2015, according to market analyst Biocom. But while the total represents an 18% increase over the same period of last year, a stuttering final quarter could cause 2015 to end with a whimper.
Performance to date has been driven by listings both on European exchanges and on Nasdaq. By the end of September, biotechs had raised almost €614 million through IPOs in Europe, just 15% short of the total generated in all of last year. If Acacia Pharma and Shield Therapeutics had raised the £260 million targeted in their London IPOs, the amount pulled in by biotechs in Europe this year would have blasted past 2014 with months to spare. Even if the European IPO market limps to the end of the year, 2015 will still go down as a huge 12 months by historic standards.
European biotechs may have more luck raising cash in the final months of 2015 on Nasdaq, where the size of listings has trended down but companies have continued to persuade investors to part with their cash. In the first 9 months of the year, European biotechs raised €394 million through Nasdaq IPOs. If 2015 is to go down as a historic high, companies must pull in €113 million over the final three months of the year. Strongbridge Biopharma ($SBBP) raised around €23 million last month. And Basilea Pharmaceutica and Merus are still waiting in line.
The steady flow of European biotechs heading to Nasdaq and raising significant sums of money is a new phenomenon--from 2010 to 2013 only two companies did so--but one that participants in the trend see as having legs. "If we could rewrite history, we would probably go straight to Nasdaq," DBV Technologies ($DBVT) COO David Schilansky said. Many of DBV's smaller compatriots take a different view, though. In the first 9 months of 2015, 5 biotechs listed in Paris, resulting in the exchange leapfrogging London to top the list of European cities with the most drug development stocks.
After the Circassia (LSE:CIR)-driven excitement of 2014, London has had a relatively quiet year. No drug developers have listed on the main exchange, while the Alternative Investment Market has handled a trickle of tiny listings.
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