After taking a short break in August, the biotech IPO boom is expected to get back underway this week with at least four new offerings. And with stock prices for the sector surging and a bright sun shining on the drug development industry for the first time since the 2008 financial crisis, there's also fresh evidence that public biotechs have been cashing in at the ATM.
On the IPO front, Fate Therapeutics is set to price an initial offering of 4 million shares at a hoped-for range of $14 to $16. Fate is joining a trio of Fierce 15 companies looking to make the leap into the public markets this week: Acceleron Pharma, out to raise $65 million; Bind Therapeutics, a Bob Langer biotech looking for about $71 million; and Five Prime Therapeutics, a 12-year-old San Francisco-based biotech looking for a $200 million market valuation.
According to the latest tally we have at FierceBiotech, 31 biotech companies have raised more than $2 billion this year from their IPOs.
And Brinson Patrick, a division of Meyers Associates, says the industry-wide surge has inspired a slate of new ATMs, those at-the-market offerings in which companies gradually sell shares at the market rate rather than opting for the traditional path of selling a block of shares at a fixed amount. During the first half of the year biotechs raised $285 million from ATMs, with $108 million flowing in the second quarter compared to only $50 million for the same period last year.
"The biotech and pharmaceutical industries continue to raise record amounts of capital with ATM offerings," said Todd Wyche, president of Brinson Patrick. This new division was launched, in part, to market ATMs, so their release on the numbers was a nifty way to tout their services.
The tap on venture cash has also been running high so far this year. There was a $1.3 billion burst of new rounds in the second quarter. After the first 6 months of the year, Burrill & Co. reported that life sciences companies overall had generated $56 billion in cash, compared to only $35 billion for the first half of 2012.
The fresh flow of billions of dollars into biotech in the U.S. should help push a surge in R&D that has helped offset a flat rate of spending at the Big Pharma companies. But the big question now is how long this run can last before investors get a bitter taste of the same medicine that chilled the industry for years.
- here's the story on the new IPOs from Renaissance Capital
- read the release on the ATM burst
Special Report: No end of biotech IPO frenzy in sight