Biotech's IPO boom flirts with new heights as dollars pour in

The biotech IPO hot streak that began as an aberration is now in its third year with few signs of fatigue, and 2015's pace of Wall Street debuts could result in the biggest year ever for life sciences offerings.

Through last week, 29 drug developers have gone public in 2015, according to RBC analyst Michael Yee, and, as Investor's Business Daily notes, the $2.9 billion they've raised surpasses 2014's first-half haul. And still to come is an expected big week for biotech, as Seres Therapeutics, Glaukos, Catabasis and Pieris are all scheduled to price before the end of June, lining up to heap another $400 million or so onto 2015's IPO total.

The next quarter looks similarly bountiful, too. Australia's Benitec Biopharma filed to raise $70 million to support its work in gene therapies for hepatitis C, while ADHD drug developer Neos Therapeutics is looking for $69 million and Patrick Soon-Shiong's Conkwest is angling for a $173 million IPO.

Such a wide open window has naturally fueled concerns that biotech is cresting toward the top of its bullish run, benefiting from a bubble liable to burst. But some analysts and investors argue the industry has matured since the frothy days of the early millennium, settling into a more selective ecosystem that could be sustainable in the long term. Not every member of 2015's IPO class is trading up, IBD points out, which analysts see as a sign of discernment among investors.

Hanging over that debate is Axovant Sciences ($AXON), which, depending on whom you ask, is either a historic success story or a poster child for biotech's over-inflated valuation system. The company, not yet a year old, pulled off a $315 million IPO this month on the promise of RVT-101, a Phase III-ready Alzheimer's disease drug Axovant bought off GlaxoSmithKline ($GSK) for $5 million up front. Such a short and dramatic return on investment left many market watchers scratching their heads, and, pointing to the company's nearly $2 billion market cap, some analysts believe Axovant may come to symbolize the peak of biotech's recent boom.

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