Biotech IPOs roared back in 2017, but what will the next year bring?

Nasdaq
The window blew open from Q2 this year, and is not showing any signs of closing anytime soon

Reporting on biotech public offerings in 2016 was a hit-or-miss affair. If we’re honest, it was mainly a miss: Many were cancelled or came out of the gate with low-end offerings as the window appeared to be all but closed.

There was a crack in early 2017 and some light came in, but since the second quarter IPOs have ramped up, with 40 U.S. biotechs getting off their IPOs to date. That's a dozen more than 2016, with deal values also doubling, from $2 billion to $4 billion, according to Renaissance Capital.

And the market saved the best for last: Denali Therapeutics managed to raise a massive $250 million. As the biggest biotech listing of the year, the IPO sets it up to push drugs against Alzheimer’s and Parkinson’s diseases through early clinical trials.

And it wasn’t an outlier, as Fierce 15 2016 winner and rare disease biotech Rhythm Pharmaceuticals topped its expectations in its IPO, selling more shares—at a higher price—than expected, hitting $120 million.

Not every company has been successful, however. Accelerated Pharma pulled its troubled attempts at an IPO back in August—although such moves have been the exception rather than the rule this year.

But many biotechs still remains cautious. With a series of CEOs of private companies telling me they are still awaiting the right time and environment, 2018 could prove to be that time, if the momentum built up over the past few quarters continues into the new year, and beyond.